Collateral Cryptocurrency Backed Payment

ABSTRACT

A method comprises initiating, by a by a cryptocurrency wallet of a user computing device of one or more user computing devices of a cryptocurrency collateral system, a payment with a merchant computing device of the cryptocurrency collateral system. The merchant computing device accepts a desired currency. The method further includes determining, by a network computing device of the cryptocurrency collateral system, an amount of collateral cryptocurrency required to back the payment. The method further includes locking, by the cryptocurrency wallet, the amount of the collateral cryptocurrency to back the payment. The method further includes sending, by the network computing device, an amount of the desired currency to the merchant computing device to complete the payment. When the cryptocurrency wallet sends funds to the network computing device to cover the payment, the method further includes releasing, by the cryptocurrency wallet, the amount of the collateral cryptocurrency.

CROSS-REFERENCE TO RELATED APPLICATIONS

The present U.S. Utility patent application claims priority pursuant to35 U.S.C. § 120 as a continuation of U.S. Utility application Ser. No.16/695,459, entitled “SECURE AND TRUSTED CRYPTOCURRENCY ACCEPTANCESYSTEM” filed Nov. 26, 2019, which is hereby incorporated herein byreference in its entirety and made part of the present U.S. Utilitypatent application for all purposes.

STATEMENT REGARDING FEDERALLY SPONSORED RESEARCH OR DEVELOPMENT

Not Applicable.

INCORPORATION-BY-REFERENCE OF MATERIAL SUBMITTED ON A COMPACT DISC

Not Applicable.

BACKGROUND OF THE INVENTION Technical Field of the Invention

This invention relates generally to secure and trusted financialtransactions involving cryptocurrency and more particularly to a secureand trusted cryptocurrency acceptance system.

Description of Related Art

Current payment systems are vulnerable to security breaches, fraud, andidentity theft. A typical payment card transaction with a merchantinvolves several steps (e.g., card authorization, clearing, andsettlement) and the participation of various entities (e.g., financialinstitutions, credit card companies, and a payment processing networks).Each step and each entity has its own varying security problems (e.g.,hacking).

The steps involved are also inconvenient, time consuming, and expensive.For example, card authorization (e.g., credit or debit cardauthorization) begins with the cardholder presenting the card to amerchant for goods or service. The card is issued by a particularfinancial institution (e.g., a bank) and is associated with a creditcard company (e.g., Visa, Mastercard, etc.). The merchant uses a creditcard machine, software, or gateway to transmit transaction data to theiracquiring bank (or its processor). The acquiring bank routes thetransaction data to a payment processing network and the paymentprocessing network sends the transaction data to the cardholder'sissuing bank. The issuing bank validates that the card has not beenreported stolen or lost, confirms whether funds are available, and sendsa response code back through the payment processing network to theacquiring bank as to whether the transaction is approved.

The transaction data typically includes the card number, transactionamount, date, merchant's name, merchant's location, merchant categorycode, and an encrypted personal identification number (PIN) if entered.The response code reaches the merchant's terminal and is stored in afile until it is settled. The merchant sends the stored, approvedtransactions to its acquiring back (e.g., at the end of the day) and theacquiring bank reconciles and transmits approved transactions throughthe appropriate card-processing network. The acquiring bank depositsfunds from sales into the merchant's account. The payment processingnetwork debits the issuing bank account and credits the acquiring bankaccount for the amount of the transaction.

Merchants pay substantial credit card processing fees, and those costsare passed along to consumers. Most merchants pay an interchange rate ona total transaction and a flat fee to the credit card company involved(e.g., Visa, Mastercard, etc.). Rates vary based on the credit cardcompany, the credit card type (e.g., credit, debit, business, etc.),processing type (e.g., online payment, swiped, through a mobile device,card not present, etc.), and a Merchant Category Code (MCC) thatclassifies a merchant's type of business. Further, merchants typicallypay a commission and a flat fee to the payment processing network.

Mobile wallet applications allow cardholders to store card data on acomputing device via a digital wallet for convenient transactions. Forexample, some mobile wallet apps use near field communication (NFC) forcontactless payments (e.g., exchange of data by holding device over apayment reader). NFC chips are specifically designed to manage financialsecurity and only store data needed to initiate and complete atransaction. Mobile wallets use types of tokenization to assign a deviceaccount number (DAN) in place of an account or card number so that theDAN is passed to the merchant rather than the actual account/cardnumber. As another security measure, digital wallets rely on digitalcertificates to verify identity. However, using a digital wallet on adevice means data passes through not only the device's hardware andoperating system but then also a specific payment app, and then finallythe source of payment. Further, user fraud via mobile wallets ispossible.

Distributed ledger technology (e.g., a blockchain) reduces the risk offraudulent activity. For example, a blockchain is an immutable ledgerfor recording transactions within a network, consisting of acontinuously growing list of blocks (i.e., groups of transactions) thatare securely linked, continually reconciled, and shared among allnetwork participants (i.e., a decentralized network). Transactions arevalidated and added to blocks via hashing algorithms, and thenpermanently written to the chain via consensus of the entire network.Once recorded on the blockchain, transactions cannot be altered.

A cryptocurrency is a digital asset that is securely created andtransferred via cryptography. Many cryptocurrencies are distributednetworks based on distributed ledger technology (e.g., a blockchain).Decentralized networks like Bitcoin use pseudo-anonymous transactionsthat are open and public (i.e., anyone can join, create, and viewtransactions). To minimize fraudulent activity and deter maliciousnetwork activity, cryptocurrency transactions can be recorded by“miners” using “proof of work” secure hashing algorithms (SHA-256) thatrequire significant computing power. While many cryptocurrencies areblockchain based, other distributed ledger technologies may be used. Forexample, asynchronous consensus algorithms enable a network of nodes tocommunicate with each other and reach consensus in a decentralizedmanner. This method does not need miners to validate transactions anduses directed acyclic graphs for time-sequencing transactions withoutbundling them into blocks.

BRIEF DESCRIPTION OF THE SEVERAL VIEWS OF THE DRAWING(S)

FIG. 1 is a schematic block diagram of an embodiment of a secure &trusted cryptocurrency acceptance system in accordance with the presentinvention;

FIGS. 2A-2C are flowcharts of an example of a method of a financialtransaction of the secure & trusted cryptocurrency acceptance system inaccordance with the present invention;

FIG. 3 is a schematic block diagram of an example of an attemptedfraudulent transaction within the secure & trusted cryptocurrencyacceptance system in accordance with the present invention;

FIG. 4 is a flowchart of an example of attempted network attack withinthe secure & trusted cryptocurrency acceptance system in accordance withthe present invention;

FIGS. 5A-5B are flowcharts of an example of a wallet authorizationfailure within the secure & trusted cryptocurrency acceptance system inaccordance with the present invention;

FIG. 6 is a schematic block diagram of an embodiment of a stake pool ofthe secure & trusted cryptocurrency acceptance system in accordance withthe present invention;

FIG. 7 is a schematic block diagram of an embodiment of a stake accountsetup in accordance with the present invention;

FIG. 8 is a schematic block diagram of an embodiment of a stake pool ofthe secure & trusted cryptocurrency acceptance system in accordance withthe present invention;

FIG. 9 is a schematic block diagram of an example of a rewardsdistribution to one or more stake accounts in accordance with thepresent invention;

FIG. 10 is a schematic block diagram of an embodiment of the stake poolof the secure & trusted cryptocurrency acceptance system in accordancewith the present invention;

FIG. 11 is a schematic block diagram of an “on-chain” stake accountwithdrawal in accordance with the present invention;

FIG. 12 is a flowchart of an example of a method of calculating stakeaccount rewards withdrawal in accordance with the present invention;

FIG. 13 is a schematic block diagram of another embodiment of the secure& trusted cryptocurrency acceptance system in accordance with thepresent invention;

FIGS. 14A-14C are flowcharts of an example of a method of a financialtransaction of the secure & trusted cryptocurrency acceptance system inaccordance with the present invention;

FIG. 15 is a schematic block diagram of an embodiment of a worldwidenetwork of cryptocurrency exchange devices of the secure & trustedcryptocurrency acceptance system in accordance with the presentinvention; and

FIG. 16 is a schematic block diagram of another embodiment of the secure& trusted cryptocurrency acceptance system.

DETAILED DESCRIPTION OF THE INVENTION

FIG. 1 is a schematic block diagram of an embodiment of a secure &trusted cryptocurrency acceptance system 10 that includes a payorcomputing device 12, a payee computing device 14, a cryptocurrencyacceptance network computing device 16, one or more cryptocurrencyexchange device(s) 18, a database 20, and a consensus network 36 thatincludes a plurality of consensus devices 1-n. The secure & trustedcryptocurrency acceptance system 10 enables secure and trusted financialtransactions between a payor computing device 12 paying with acryptocurrency and a payee computing device 14 accepting a desiredcurrency (e.g., fiat currency) to overcome one or more of the followingissues.

At the filing of this application, cryptocurrency is not widely acceptedby merchants as a form of payment for a variety of reasons. For example,the value of cryptocurrency can be volatile, sometimes fluctuatingdramatically in the course of one day. As another example, merchants arereluctant to invest in expensive point-of-sale upgrades to accommodatecryptocurrency payments directly. As yet another example, most customersand merchants do not wish to have their transactions made public, whichwould occur since many cryptocurrency payments are public.

While some developed digital wallets applications have been developed toenable retail blockchain payments, they are universally dependent onexisting payment networks and thus are susceptible to fraud attacks ofthe existing payment networks. For example, a cryptocurrency is linkedto a credit card, where a cryptocurrency payment is converted andconducted as a credit card transaction and, thus susceptible to the samefraud attacks as credit cards.

Even though cryptocurrencies significantly reduce fraudulent activity ascompared to traditional payment systems, fraudulent cryptocurrencytransactions are still possible. For example, malicious users canmanipulate a cryptocurrency blockchain to “double spend” (e.g., createone block to transfer an amount to a merchant and another block totransfer the amount back to him or herself). As another example,malicious or faulty digital wallet software can prevent a cryptocurrencytransaction from being authorized and completed correctly.

Within the secure & trusted cryptocurrency acceptance system 10 thepayor computing device 12, the payee computing device 14, thecryptocurrency acceptance network computing device 16, the one or morecryptocurrency exchange device(s) 18, and the consensus devices 1-n maybe portable computing devices and/or a fixed computing devices. Aportable computing device may be a social networking device, a gamingdevice, a cell phone, a smart phone, a digital assistant, a digitalmusic player, a digital video player, a laptop computer, a handheldcomputer, a tablet, a video game controller, a portable merchantpoint-of-sale (POS) device (e.g., a mobile device with POS capabilities)and/or any other portable device that includes a computing core 26. Afixed computing device may be a computer (PC), a computer server, acable set-top box, a satellite receiver, a television set, a printer, afax machine, home entertainment equipment, a video game console, a fixedmerchant point-of-sale (POS) device (e.g., cash register), and/or anytype of home or office computing equipment.

The network 22 includes one or more local area networks (LAN) and/or oneor more wide area networks (WAN), which may be a public network and/or aprivate network. A LAN may be a wireless-LAN (e.g., Wi-Fi access point,Bluetooth, ZigBee, etc.) and/or a wired LAN (e.g., Firewire, Ethernet,etc.). A WAN may be a wired and/or wireless WAN. For example, a LAN is apersonal home or business's wireless network and a WAN is the Internet,cellular telephone infrastructure, and/or satellite communicationinfrastructure.

Each of the payor computing device 12, the payee computing device 14,the cryptocurrency acceptance network computing device 16, the one ormore cryptocurrency exchange device(s) 18, and the consensus devices 1-nincludes a network unit 24, a computing core 26, an input/output (IO)unit 28, and a memory 30. Each network unit 24 includes software andhardware to support one or more communication links via the network 22directly and/or indirectly. For example, the network unit 24 of thepayor computing device 12 supports a network 22 communication linkbetween the payor computing device 12 and the devices 14-16. Thecomputing cores 26 include one or more of: one or more processingmodules, one or more main memories (e.g., RAM), a core control module, avideo graphics processing module, an IO control module, and a peripheralinterface control module.

The IO units 28 enable connections between devices 12-18 and userinputs/peripheral devices. Unit inputs/peripheral devices include one ormore of an external hard drive, headset, a keypad, a keyboard, controlswitches, a touchpad, a speaker, a microphone, a thumb drive, a camera,etc.

The memories 30 include one or more of main memory (RAM), hard drives,solid-state memory chips, one or more other large capacity storagedevices, and/or cache memory. The memories 30 store operationalinstructions for the computing cores 26. For example, the payorcomputing device 12 memory 30 stores data application “b” 40, thecryptocurrency acceptance network computing device 16 memory 30 storesdata application “a” 38, and the payee computing device 16 memory 30stores data application “c” 42. The payor computing device 12 memory 30further stores a network cryptocurrency wallet 46. The variousapplications stored by the devices support secure and trustedcryptocurrency transactions within the system as described herein.

The database 20 is a special type of computing device that is optimizedfor large scale data storage and retrieval. The database 20 includessimilar components to that of the devices 12-18 with more hard drivememory (e.g., solid state, hard drives, etc.) and potentially with moreprocessing modules and/or main memory. Further, the database 20 istypically accessed remotely; as such it does not generally include userinput devices and/or user output devices. An embodiment of a database 20may include a standalone separate computing device and/or may be a cloudcomputing device.

The database 20 includes cryptocurrency wallets for users 1-n 48-50. Thecryptocurrency acceptance network computing device 16 and the database20 are secure devices implementing high level security protocols toprevent unauthorized use, hacking, etc. For example, the database 20 isa cryptocurrency holding company separate from the cryptocurrencyacceptance network computing device 16 that has been specially licensedto store sensitive materials and has insurance policies to protectagainst theft and fraud.

The cryptocurrency exchange device(s) 18 are specially licensed entitiesoperable to convert cryptocurrency to a desired currency (e.g., fiatcurrency, another cryptocurrency, etc.). In an embodiment, thecryptocurrency exchange device(s) 18 are associated with one or morecryptocurrency holding companies that are specially licensed to storesensitive materials and have insurance policies to protect against theftand fraud. In another embodiment, cryptocurrency exchange device(s) 18are standalone secure devices.

The cryptocurrency exchange device(s) 18 may be associated with a storedvalue account (SVA) device where the SVA device is associated with thepayee computing device 14 (e.g., the payee computing device has an SVAaccount with the SVA device) such that the one or more of thecryptocurrency exchange device(s) 18 are operable to generate SVAs fortransactions. In another embodiment, one or more of the cryptocurrencyexchange device(s) 18 and the cryptocurrency acceptance networkcomputing device 16 are operable to generate stored value accounts(SVAs) and/or are associated with one or more entities operable togenerate SVAs. Generation of SVAs for transactions is described inco-pending patent application Ser. No. 16/376,911, entitled, “SECURE ANDTRUSTED DATA COMMUNICATION SYSTEM,” filed Apr. 5, 2019.

The cryptocurrency acceptance network computing device 16 furtherincludes a database interface 34 that enables a connection between thecryptocurrency acceptance network computing device 16 and the database20. The payor computing device 12 and the payee computing device 14include a direct communication unit 32 that allows for a directcommunication between them. For example, the direct communication unit32 includes technology to establish a direct link between the payorcomputing device 12 and the payee computing device 14 via video,infrared (IR), near-field communication (NFC), etc.

The payee computing device 14 may be one or more computing deviceshaving an affiliation with a specific merchant identifier (ID). Forexample, the payee computing device 14 is a point of sale (POS) devicein a retail store associated with a particular merchant having thespecific merchant ID. The payee computing device 14 is associated withthe cryptocurrency acceptance network computing device 16. For example,the payee computing device has an account with the cryptocurrencyacceptance network computing device 16. The account setup establishesdata application “c” 42 in the payee computing device 14's memory 30 andincludes instructions for securely receiving payments via the secure &trusted cryptocurrency acceptance system 10.

The payor computing device 12 is associated with a user and isassociated with the cryptocurrency acceptance network computing device16. For example, the payor computing device 12 (e.g., a user's smartphone) downloads and stores the network cryptocurrency wallet 46 whichincludes data application “b” 40, and the network cryptocurrency wallet46 is associated with the cryptocurrency acceptance network computingdevice 16. For example, the network cryptocurrency wallet 46 may be asecure custodial digital wallet managed by the cryptocurrency acceptancenetwork computing device 16 (e.g., via database 20). In this example,the payor computing device 12 (e.g., user 1) sets up a user account withthe cryptocurrency acceptance network computing device 16 for the secureand trusted storage of cryptocurrency via the network cryptocurrencywallet 46. The payor computing device 12 initiates user account set-upand downloads data application “b” 40 which includes instructions forcryptocurrency management, storage, and transactions.

The cryptocurrency acceptance network computing device 16 memory 30stores data application “a” 38, which has instructions forcryptocurrency management, conveyance, and storage via the database 20(e.g., user cryptocurrency wallet creation and management, etc.). Forexample, upon the payor computing device 12's user account set up, thecryptocurrency acceptance network computing device 16 generates one ormore cryptocurrency wallets associated with the payor computing device12 in the database 20. For example, the cryptocurrency acceptancenetwork computing device 16 generates the cryptocurrency wallet user 148 in the database 20 for secure storage of the payor computing device12's cryptocurrency.

The cryptocurrency acceptance network computing device 16 functions tostore cryptocurrency on behalf of a payor computing device as describedin co-pending patent application Ser. No. 16/376,911, entitled, “SECUREAND TRUSTED DATA COMMUNICATION SYSTEM,” filed Apr. 5, 2019 (see securedata conveyance device 14 and user computing device 12).

As another example, the cryptocurrency acceptance network computingdevice 16 does not store cryptocurrency on behalf of the payor computingdevice 12. For example, the network cryptocurrency wallet 46 is managedby a digital wallet developer that is associated with the cryptocurrencyacceptance network computing device 16. For example, the digital walletdeveloper has an account with the cryptocurrency acceptance networkcomputing device 16. The digital wallet developer may be a custodialwallet that stores cryptocurrency on behalf of the payor computingdevice 12 or it may be a private wallet where only payor computingdevice 12 has access to network cryptocurrency wallet user's private keyinformation. In either example, when the payor computing device 12 setsup a user account with the network cryptocurrency wallet 46, dataapplication “b” 40 is installed which includes instructions onprocessing financial transactions using the network cryptocurrencywallet 46.

Each of the plurality of consensus devices 1-n of the consensus network20 includes a network unit (e.g., like network unit 24), computing core(e.g., like computing core 26), IO unit (e.g., like IO unit 28), and isconnected via the network 22. The consensus devices 1-n validatecryptocurrency transactions. For example, a consensus device uses “proofof work” secure hashing algorithms to validate a cryptocurrencytransaction block (e.g., a “miner”) and adds the block to theblockchain. When a transaction is validated enough times (i.e., enoughblocks verifying the transaction are added to the blockchain), it isadopted by the consensus network 36 as valid (i.e., a consensus amongthe consensus devices 1-n is reached). As another example, the consensusdevices 1-n use asynchronous consensus algorithms to communicate witheach other and reach consensus in a decentralized manner. This methodinvolves using directed acyclic graphs for time-sequencing transactionswithout bundling them into blocks. Other methods of decentralizedconsensus may be used.

The cryptocurrency acceptance network computing device 16 furtherincludes a stake pool unit 44. The stake pool unit 44 includes one ormore memory devices, or is part of another memory device (e.g., memory30), and includes a processing module, or is part of a processing moduleof the computing core 26). The stake pool unit 44 stores informationregarding stake accounts 1-n, includes a stake account manager 52, andstores information regarding a transaction fee/rewards pool 80. Thestake accounts 1-n store collateral cryptocurrency to securetransactions within the secure & trusted cryptocurrency acceptancesystem 10. Collateral cryptocurrency is purchased from a set amount ofsystem specific cryptocurrency created for use within the secure &trusted cryptocurrency acceptance system 10. In order to be recognizedby the secure & trusted cryptocurrency acceptance system 10, acryptocurrency wallet must be associated with a stake pool account thatis backed with collateral cryptocurrency.

For example, a digital wallet developer creates an account with thecryptocurrency acceptance network computing device 16 in order for itswallet users to be a part of the secure & trusted cryptocurrencyacceptance system 10. As part of the account set up, the digital walletdeveloper purchases and pledges a certain amount of collateralcryptocurrency into a stake account for purposes of backing thefinancial transactions of its wallet users. When the networkcryptocurrency wallet 46 is managed by the cryptocurrency acceptancenetwork computing device 16, the cryptocurrency acceptance networkcomputing device 16 must also purchase and pledge collateralcryptocurrency into a stake account for its wallet users. An entity thatpledges collateral cryptocurrency is referred to as a staking entity.

The stake account manager 52 manages the plurality of stake accounts1-n. In an embodiment, the stake accounts 1-n are “on-chain” smartcontracts such as an Ethereum blockchain smart contract (i.e., they arevisible to everyone) but the stake account manager 52 stores informationand conducts activities “off-chain” (i.e., privately). For example, thestake manager manages withdrawals of rewards from stake accounts,maintains an event log of stake pool activities, stores staking entityinformation (e.g., rewards percentage per successful transaction, termsof rewards withdrawals, etc.), and calculates the rewards owed to thestaking entities at a given time.

In exchange for pledging collateral cryptocurrency, staking entities areprovided rewards such as a percentage back on successful transactionscompleted by their wallet's users. Because of the incentives provided, avariety of staking entities (e.g., individual user computing devices,other wallet developers) may wish to pledge collateral cryptocurrencyinto one or more stake accounts. Therefore, a staking entity of thestake pool unit 44 includes one or more digital walletdeveloper/managers and potentially one or more other computing devices.

Because there is a finite amount of system cryptocurrency, the value ofthe system cryptocurrency will continue to grow and serve as furtherincentive for a variety of staking entities to obtain and pledgecollateral cryptocurrency into stake accounts. Also, because incentivesare provided based on successful transactions, digital walletdevelopers/managers are motivated to produce and maintain a securedigital wallet (e.g., no faulty software) and prevent and deterfraudulent activity by its users on the network. The stake pool unit 44will be discussed in greater detail with reference to FIGS. 6-12.

In an example of operation, the payor computing device 12 establishes adirect communication link with the payee computing device 14 via thedirect communication link 32 (e.g., NFC, IR, RF). The payor computingdevice 12 sends the payee computing device 14 a request to initiatepurchase of a product or service using cryptocurrency stored in thenetwork cryptocurrency wallet 46. The payee computing device 14 acceptsa desired currency (e.g., fiat currency, a form of cryptocurrency,etc.).

The request to initiate purchase may be in the form of a split bar code,where the payor computing device 12 maintains one portion of a bar codeand the payee computing device 14 maintains another portion of a barcode such that when they are aligned in close proximity, the conveyanceis initiated. Having a correct piece of a barcode from the payorcomputing device 12 as well as the act of alignment, demonstrates intentto enter into a financial transaction (i.e., user authorization). Asanother example, the request is a secure handshake protocol between thepayor computing device 12 and the payee computing device 14.

When the request to initiate the financial transaction is approved bythe payee computing device 14 (e.g., via the split bar code example),the payor computing device 12 receives an acknowledgement of thefinancial transaction (e.g., a one-time use code such as a transactionID) from the payee computing device 14. The one-time use code is one ormore of: a unique number, an alpha numeric, a function, and/or any itemthat uniquely connects the parties in the transaction to the particulartransaction. For example, the payee computing device 14 approves therequest when the payee computing device 14 is affiliated with thecryptocurrency acceptance network computing device 16, the payorcomputing device 12 is a trusted computing device (e.g., by verificationof ID, certificate, etc.), etc.

When a financial transaction is initiated by the payor computing device12 using the network cryptocurrency wallet 46, the cryptocurrencyacceptance network computing device 16 receives an acknowledgment of theinitiation of the financial transaction and a request to process thefinancial transaction. For example, the payor computing device 12 sendsthe request to process the financial transaction plus the one-time usecode to the cryptocurrency acceptance network computing device 16. Thecryptocurrency acceptance network computing device 16 places a hold onan amount of collateral cryptocurrency in a stake account of the stakepool unit 44 associated with the network cryptocurrency wallet 46.

The amount of collateral cryptocurrency placed on hold may be determinedbased on one or more properties of the network cryptocurrency wallet 46and/or the stake account associated with the network cryptocurrencywallet 46. For example, the amount of collateral cryptocurrency placedon hold is a default hold amount based on one or more of the payeecomputing device and the network cryptocurrency wallet. As a specificexample, transactions involving a particular merchant require a defaultamount of collateral cryptocurrency placed on hold. As another specificexample, transactions using a particular network cryptocurrency walletmay require a default amount of collateral cryptocurrency placed on holdregardless of the merchant or user involved.

As another example, the amount of collateral cryptocurrency placed onhold is based on the characteristics of one or more of the payorcomputing device 12, the payee computing device 14, and the stakeaccount involved. As a specific example, the amount of collateralcryptocurrency placed on hold may be based on the amount ofcryptocurrency the payor computing device 12 typically spends on anindividual transaction. As another specific example, when the payeecomputing device 14 is associated with a high end merchant, a greateramount of collateral cryptocurrency is placed on hold. As yet anotherspecific example, the amount of collateral cryptocurrency placed on holdmay be based on the balance of the stake account. A higher balance mayindicate that higher amounts of collateral cryptocurrency may be placedon hold for individual transaction.

As another example, the amount of collateral cryptocurrency placed onhold is based on the total amount of cryptocurrency currently stored inthe network cryptocurrency wallet 46 by the payor computing device. As aspecific example, the payor computing device 12 may spend any amount upto the full balance of what is stored on the network cryptocurrencywallet 46. Thus, the balance amount worth of collateral cryptocurrencyis placed on hold to cover a transaction until more information isknown.

When the amount of collateral cryptocurrency is placed on hold, thecryptocurrency acceptance network computing device 16 sends the payorcomputing device 12 an acknowledgment that the requisite amount ofcollateral cryptocurrency is on hold and the financial transaction canproceed. The payor computing device 12 sends an amount of cryptocurrencyequal to the amount of desired currency requested by the payee computingdevice 14 to the cryptocurrency acceptance network computing device 16.Sending the amount of cryptocurrency equal to the amount of desiredcurrency requested by the payee computing device to the cryptocurrencyacceptance network computing device 16 is a transaction added to thecryptocurrency blockchain of the cryptocurrency used by the payorcomputing device 12.

The transaction information includes the payment amount, the sendercryptocurrency address (the payor computing device 12), and therecipient cryptocurrency address (the cryptocurrency acceptance networkcomputing device 16). The transaction is then included within a blockthat is published on the blockchain. However, other details related tothe transaction (e.g., the identity of the payee computing device,transaction fees owed by the payee computing device, etc.) are managedprivately by the cryptocurrency acceptance network computing device 16off-chain. Therefore, by using the secure & trusted cryptocurrencyacceptance system 10, confidential payee related information (e.g.,revenue, consumer spending behavior, etc.) and confidential payorrelated information (e.g., consumer identity of purchases, amount spentat a particular merchant, payees/merchants frequented, etc.) is private(i.e., not published on the blockchain for anyone to see).

Alternatively, or additionally, the payee computing device 14 sends anotice of the financial transaction which includes the amount of desiredcurrency requested (e.g., an amount of US dollars) to the cryptocurrencyacceptance network computing device 16. The cryptocurrency acceptancenetwork computing device 16 sends the payor computing device 12 anetwork transaction acknowledgement that the amount of cryptocurrencyhas been received and is covered by the amount of collateralcryptocurrency placed on hold.

Alternatively, when the amount of desired currency requested is morethan the amount of collateral cryptocurrency on hold, the cryptocurrencyacceptance network computing device 16 may place further collateralcryptocurrency on hold to equal the amount of desired currency requestedif allowed (e.g., by the terms of the stake account associated with thenetwork cryptocurrency wallet 46). If not allowed, the cryptocurrencyacceptance network computing device 16 cancels the transaction beforethe transaction is finalized between the payor computing device 12 andthe payee computing device 14.

The payor computing device 12 sends the payee computing device 14 anotification to finalize the transaction. The notification to finalizethe transaction includes the network transaction acknowledgementinformation from the cryptocurrency acceptance network computing device16 (e.g., the amount of cryptocurrency has been received and is coveredby the amount of collateral cryptocurrency placed on hold) such that thepayee computing device 14 can close the financial transaction knowingthat the desired funds will arrive.

The cryptocurrency acceptance network computing device 16 seeks adesired number of confirmations of payor computing device 12'scryptocurrency payment from the consensus network 20. The desired numberof confirmations corresponds to the type of cryptocurrency used. Receiptof the desired number of confirmations may take minutes to hours oftime.

For example, in the Bitcoin blockchain, miners record new transactionsinto blocks that verify all previous transactions within the blockchain.On average, it takes a miner ten minutes to write a block on the Bitcoinblockchain and the average block time depends on a total hash power ofthe Bitcoin network. Once a block is created and a new transaction isverified and included in a block, the transaction will have oneconfirmation. Each subsequent block (which verifies the previous stateof the blockchain) provides one additional network confirmation.Typically, between 5-10 transaction confirmations are acceptable forcryptocurrency exchanges to avoid losses due to potential fraud.Therefore, if the payor computing device 12 is using Bitcoin, thetransaction may not be confirmed by the consensus network 36 (i.e.,Bitcoin miners) for an hour or more.

However, because every financial transaction is backed with collateralcryptocurrency, the cryptocurrency acceptance network computing device16 proceeds with the financial transaction and is guaranteed that thedesired amount of confirmations will be received.

The cryptocurrency acceptance network computing device 16 adjusts theamount of collateral cryptocurrency on hold to equal the amount ofdesired currency requested when the amount of desired currency requestedis less than the amount of collateral cryptocurrency on hold. Forexample, if the equivalent of $20 worth of collateral cryptocurrency isplaced on hold but the transaction specifies a payment amount of $10,the cryptocurrency acceptance network computing device 16 releases thehold on $10 worth of the $20 worth of collateral cryptocurrency that isnot required to back the transaction.

The cryptocurrency acceptance network computing device 16 sends theamount of cryptocurrency sent by the payor computing device 12 to thecryptocurrency exchange device(s) 18. The cryptocurrency exchangedevice(s) 18 convert the amount of cryptocurrency sent by the payorcomputing device 12 to an amount equal to the amount of desired currencyrequested by the payee computing device 14. Cryptocurrency exchange isdone quickly (e.g., 30 seconds to a few minutes) to account for exchangerate volatility. The exchange can also be performed in real time on acredit-based account to eliminate any pricing volatility. Thecryptocurrency exchange device(s) 18 deposit the amount equal to theamount of desired currency requested by the payee computing device 14into a payee banking computing device associated with the payeecomputing device 14.

Alternatively, the cryptocurrency exchange device(s) 18 deposit theamount equal to the amount of desired currency requested by the payeecomputing device 14 into a cryptocurrency acceptance system bankingdevice of the secure & trusted cryptocurrency acceptance system and thecryptocurrency acceptance system banking device deposits the amountequal to the amount of desired currency into the payee banking computingdevice. The payee banking computing device sends a receipt of thedeposit of the amount of desired currency plus a transaction fee to thecryptocurrency acceptance network computing device 16.

Transaction fees are accumulated and used to purchase system specificcryptocurrency for distribution to one or more of stake accounts 1-n asrewards. The transaction fees are stored in the transaction fee/rewardspool 80 of the stake pool unit 44 until a distribution of rewards occurs(e.g., upon request by a staking entity, at a predetermined time, orafter a certain amount of transactions occur etc.). The stake accountmanager 52 calculates rewards owed using a zero knowledge proof smartcontract to batch and distribute rewards to one or more stake accounts.A more detailed discussion of the stake account manager 52 and rewardscalculation will be discussed with reference to FIGS. 8-9.

In another embodiment, the cryptocurrency acceptance network computingdevice 16 is further operable to instruct the cryptocurrency exchangedevice(s) 18 to convert the amount of cryptocurrency sent by the payorcomputing device 12 to an SVA in the amount equal to or more than theamount of desired currency requested by the payee computing device 14.Use of an SVA is another method of securing financial transactions ofthe secure & trusted cryptocurrency acceptance system 10. An SVA isvalid for a particular financial transaction, expires in a short periodof time (e.g., a few seconds, 30 seconds, one minute, or more) if notproperly received by the payee computing device 14, and is only usableby the payee computing device 14. If a remaining balance exists afterthe transaction, the SVA is adjusted automatically to the actual spentamount. Creation and use of an SVA happens very quickly in order tominimize the volatility aspects of cryptocurrency conversion.

When the desired number of confirmations are received for thetransaction between computing device 12 payee computing device 14 by thecryptocurrency acceptance network computing device 16 from the consensusnetwork 36, the cryptocurrency acceptance network computing device 16releases the hold on the amount of collateral cryptocurrency.

If fraudulent activity occurs (e.g., the payor computing device actsmaliciously to spend at two payee computing devices simultaneously, thesoftware of the network cryptocurrency wallet 46 is corrupted, etc.) thecryptocurrency acceptance network computing device 16 withdraws thecollateral cryptocurrency on hold from the stake account. For example,if the payor computing device 12 attempts to double spend a transaction,the desired number of confirmations will not be received. If the desirednumber of confirmations are not received, the cryptocurrency acceptancenetwork computing device 16 withdraws the amount of collateralcryptocurrency on hold to cover the transaction that occurred with thepayee computing device 14.

As another example, if the payor computing device 12 sends thecryptocurrency to the cryptocurrency acceptance network computing device16 through an error in the software of the network cryptocurrency wallet46 (e.g., the network cryptocurrency wallet 46 experiences an error andallows a user to spend money it does not have) the desired number ofconfirmations will also not be received. If the desired number ofconfirmations are not received, the cryptocurrency acceptance networkcomputing device 16 withdraws the amount of collateral cryptocurrency onhold to cover the transaction that occurred with the payee computingdevice 14.

As another example, the network cryptocurrency wallet 46 may send afinancial transaction failure notification to the cryptocurrencyacceptance network computing device 16 when the transaction occursthrough an error in the software of the network cryptocurrency wallet46. If the error is recognized by the payor computing device 12'snetwork cryptocurrency wallet 46 after finalization of the transactionwith the payee computing device 14 but prior to the cryptocurrencyacceptance network computing device 16 receiving the desired amount ofconfirmations, the network cryptocurrency wallet 46 sends the financialtransaction failure notification to the cryptocurrency acceptancenetwork computing device 16. The amount of cryptocurrency spent isrequested back, and the cryptocurrency acceptance network computingdevice 16 withdraws the amount of collateral cryptocurrency on hold tocover the transaction that occurred with the payee computing device 14.

FIGS. 2A-2C are flowcharts of an example of a method of a financialtransaction of the secure & trusted cryptocurrency acceptance system 10of FIG. 1. The method begins on FIG. 2A with step (1 a) where the payorcomputing device 12 establishes a direct communication link with thepayee computing device 14 to initiate a financial transaction. The payorcomputing device 12's network cryptocurrency wallet 46 is storing 100units of a cryptocurrency (CC) “aaa” (i.e., a first cryptocurrency).Cryptocurrency “aaa” may be any type of cryptocurrency approved forexchange by the one or more cryptocurrency exchange device(s) 18. Inthis example, the payor computing device 12 wishes to pay the payeecomputing device 14 using cryptocurrency “aaa,” but the payee computingdevice 14 accepts US dollars.

The request to initiate purchase at step (1 a) may be in the form of asplit bar code, where the payor computing device 12 maintains oneportion of a bar code and the payee computing device 14 maintainsanother portion of a bar code such that when they are aligned in closeproximity, the conveyance is initiated. Having a correct piece of abarcode from the payor computing device 12 as well as the act ofalignment, demonstrates intent to enter into a financial transaction(i.e., user authorization). As another example, the request is a securehandshake protocol between the payor computing device 12 and the payeecomputing device 14.

The method continues at step (1 b) where the payor computing device 12receives an acknowledgement of the financial transaction (e.g., aone-time use code such as a transaction ID) from the payee computingdevice 14. The one-time use code is one or more of: a unique number, analpha numeric, a function, and/or any item that uniquely connects theparties in the transaction to the particular transaction. For example,the payee computing device 14 approves the request when the payeecomputing device 14 is associated with the cryptocurrency acceptancenetwork computing device 16 and the terms of the transaction are valid.

The method continues at step (2 a) where, when a financial transactionis initiated by the payor computing device 12 using the networkcryptocurrency wallet 46, the cryptocurrency acceptance networkcomputing device 16 receives an acknowledgment of the initiation of thefinancial transaction and a request to process the financialtransaction. For example, the payor computing device 12 sends therequest to process the financial transaction plus the one-time use codeto the cryptocurrency acceptance network computing device 16.

The cryptocurrency acceptance network computing device 16 includes thestake pool unit 44. The stake pool unit 44 includes a plurality of stakeaccounts 1-n. Staking entities (e.g., wallet developers, individuals,etc.) pledge an amount of system specific cryptocurrency (Flexacoin(FXC)) to a stake account for purposes of backing financial transactionsof a cryptocurrency wallet's users (i.e., collateral cryptocurrency).Flexacoin is a token on the Ethereum blockchain developed specificallyfor use within the secure & trusted cryptocurrency acceptance system 10as a collateral utility token. A more detailed discussion of the stakepool unit 44 and the plurality of stake accounts 1-n is disclosed withreference to FIGS. 6-12.

In order for a cryptocurrency wallet to be recognized by the secure &trusted cryptocurrency acceptance system 10, the cryptocurrency walletis associated with a stake account of the stake pool unit 44. In thisexample, the network cryptocurrency wallet 46 is associated with stakeaccount 1. For example, the digital wallet developer of the networkcryptocurrency wallet 46 and possibly one or more other staking entitieshave deposited 1000 units of Flexacoin in stake account 1 to backfinancial transactions of users of the network cryptocurrency wallet 46.

At step (2 b), the cryptocurrency acceptance network computing device 16places a hold on an amount of Flexacoin in stake account 1. In thisexample, 100 units of cryptocurrency “aaa” worth of Flexacoin (e.g., anamount of Flexacoin equal to the total amount of cryptocurrency storedin the network cryptocurrency wallet 46) of the 1000 units of amount ofFlexacoin in the stake account 1 is placed on hold to back the financialtransaction. The 100 units of cryptocurrency “aaa” worth of Flexacoin isreferred to as “X” amount of Flexacoin for simplicity.

For example, if cryptocurrency “aaa” and Flexacoin have a one-to-oneconversion, “X” equals 100 units and there are now 900 units ofFlexacoin available in stake account 1 to back financial transactions ofother users of the network cryptocurrency wallet 46. The informationpertaining to the hold on “X” amount of Flexacoin of stake account 1 isadded to the stake pool smart contract. Transactions within the smartcontract include the data required to publish the state of the stakepool transactions to the blockchain. The contract may also includevarious other information.

The method continues with step (2 c), where, when the “X” amount ofFlexacoin is placed on hold, the cryptocurrency acceptance networkcomputing device 16 sends the payor computing device 12 a first networkacknowledgment (ACK) that the requisite amount of collateralcryptocurrency is on hold and the financial transaction can proceed. Ifthe requisite amount of collateral cryptocurrency cannot be placed onhold (e.g., the stake account does not have enough collateralcryptocurrency available) the cryptocurrency acceptance networkcomputing device 16 sends the payor computing device 12 an errornotification and cancels the financial transaction at step (2 c).

The method continues with step (3 a) where the payor computing device 12sends the amount of cryptocurrency “aaa” equal to the amount of USdollars requested by the payee computing device 14 to the cryptocurrencyacceptance network computing device 16. In this example, the payeecomputing device 14 is requesting $10. A transaction includinginformation pertaining to transfer of “$10” worth of “aaa”cryptocurrency is added to a block within the “aaa” blockchain. Theblock includes a header section and a transaction section. The headersection includes a block number (e.g., block #1) plus a hash of theprevious block (not shown). The header section and/or the transactionsection may include various other information.

The transaction information includes the payment amount, the sendercryptocurrency address (the payor computing device 12), and therecipient cryptocurrency address (the cryptocurrency acceptance networkcomputing device 16, not the payee computing device 14). The transactionis then included within a block that is published on the blockchain.However, other details related to the transaction (e.g., the identity ofthe payee computing device, transaction fees owed by the payee computingdevice, etc.) are managed privately by the cryptocurrency acceptancenetwork computing device 16 off-chain. Thus, by using the secure &trusted cryptocurrency acceptance system 10, confidential payee relatedinformation (e.g., revenue, items being sold, consumer spendingbehavior, etc.) and confidential payor related information (e.g.,consumer identity, items purchased, amount spent at a particularmerchant, merchants frequented, etc.) is private (i.e., not published onthe blockchain for anyone to see).

Alternatively, or additionally, the payee computing device 14 sends anotice of the financial transaction which includes the amount of desiredcurrency requested (e.g., an amount of US dollars) to the cryptocurrencyacceptance network computing device 16 at step (3 a+). The methodcontinues with step 3(b) where the cryptocurrency acceptance networkcomputing device 16 sends the payor computing device 12 a networktransaction acknowledgement (i.e., a second network acknowledgement(ACK)) that the amount of cryptocurrency received is covered by theamount of collateral cryptocurrency placed on hold. The networktransaction acknowledgment of step 3(b) may further include a storedvalue account (SVA) in an amount equal to or greater than the amount ofthe transaction generated for the payor computing device 12 to use tocomplete the transaction with the payee computing device 14.

Alternatively, if the amount of cryptocurrency received is not coveredby the amount of collateral cryptocurrency placed on hold, thecryptocurrency acceptance network computing device 16 may cancel thetransaction at 3(b) or place a further amount of Flexacoin on hold tocover the transaction at 3(b) depending on the terms of stake account 1.

In this example, the balance of the network cryptocurrency wallet 46worth of Flexacoin is placed on hold so the payor computing device 12would not be able to spend more than the amount placed on hold. However,in other examples where the amount of collateral cryptocurrency placedon hold is based on other factors (e.g., merchant ID, typicaltransaction amounts, etc.), the payor computing device 12 may initiate atransaction for more than what is placed on hold. The terms of the stakeaccount 1 indicate how to proceed in such cases. For example, the stakeaccount 1 may indicate that a user of the network cryptocurrency wallet46 has a particular spending cap on any individual purchase. Any requestthat requires a hold on over the spending cap is rejected. However, fora request equal to or lower than the spending cap, additional collateralcryptocurrency is placed on hold so that the transaction can proceed.

The method continues with step 3(c) where the payor computing device 12sends the payee computing device 14 a notification to finalize thetransaction. The notification to finalize the transaction includes thenetwork transaction acknowledgement information from the cryptocurrencyacceptance network computing device 16 (e.g., the amount ofcryptocurrency has been received and is covered by the amount ofcollateral cryptocurrency placed on hold) such that the payee computingdevice 14 can close the financial transaction knowing that the desiredfunds will arrive or be available by liquidating collateral from thestake pool contract. The notification to finalize the transaction ofstep 3(c) may further include the SVA in an amount equal to or greaterthan the amount of the transaction generated for the payor computingdevice 12 to use to complete the transaction with the payee computingdevice 14.

As a simplified example summary of FIG. 2A, the payor computing device12 desires to do a transaction with payee computing device 14 usingcryptocurrency “aaa”. The payor computing device 12 sends a request tothe payee computing device 14 regarding the desired transaction. Whenthe transaction is agreeable to the payee computing device 14, the payeecomputing device 14 sends an ACK of the transaction.

When the payor and payee computing devices agree to the desiredtransaction, the payor computing device 12 sends the cryptocurrencyacceptance network computing device 16 a request to execute thetransaction using the cryptocurrency “aaa”. If payor computing device 12has cryptocurrency “aaa” in its wallet and the cryptocurrency “aaa” isproperly staked (e.g., enough to cover the amount in the payor'swallet), then the cryptocurrency acceptance network computing device 16places a hold on the stake account. With a hold on the stake account,the cryptocurrency acceptance network computing device 16 sends anetwork ACK to the payor computing device that the payor computingdevice is authorized to use its cryptocurrency “aaa” with the payeecomputing device.

Upon receiving the network ACK, the payor computing device 12 notifiesthe cryptocurrency acceptance network computing device 16 of the amountof the transaction. If the amount of the transaction is less than theamount of cryptocurrency “aaa” that is on hold, the cryptocurrencyacceptance network computing device 16 sends an ACK for the specifictransaction. The payor and payee computing devices execute thetransaction. This process typically takes less than a few seconds toperform.

The method continues on FIG. 2B with step (4 a-1) where thecryptocurrency acceptance network computing device 16 seeks a desirednumber of confirmations of block #1 (e.g., the use of $10 worth ofcryptocurrency “aaa” for the transaction) on the “aaa” blockchain 54 viathe consensus network 36. The consensus network 36 includes a pluralityof consensus devices 1-n. For example, in the Bitcoin blockchain, minersrecord new transactions into blocks that verify all previoustransactions within the blockchain. On average, it takes a miner tenminutes to write a block on the Bitcoin blockchain and the average blocktime depends on a total hash power of the Bitcoin network.

The desired number of confirmations corresponds to the type ofcryptocurrency used. As shown here, the cryptocurrency acceptancenetwork computing device 16 requires “n” confirmations before thetransaction on the “aaa” blockchain 54 is considered “final”. Receipt ofthe desired number of confirmations may take minutes to hours of time.However, because every financial transaction is backed with Flexacoin ascollateral, the cryptocurrency acceptance network computing device 16proceeds with the financial transaction and is guaranteed that fundswill ultimately be available.

The method continues at step (4 a-2) where the cryptocurrency networkcomputing device 16 adjusts the X amount of Flexacoin on hold to equal$10 worth of Flexacoin. $10 worth of Flexacoin is referred to as “y”amount of Flexacoin for simplicity. For example, when the conversionrate between Flexacoin and US dollars is one-to-one, and X is equal to100, the cryptocurrency acceptance network computing device 16 releasesthe hold on 90 units of Flexacoin (i.e., “X-y”) such that only 10 unitsof Flexacoin are on hold. The information pertaining to the hold on“X-y” amount of Flexacoin of stake account 1 is added to the stake poolsmart contract. Transactions within the smart contract include the datarequired to publish the state of the stake pool transactions to theblockchain. The contract may also include various other information.

The method continues with step (4 a-3) where the desired number ofconfirmations are received by the cryptocurrency acceptance networkcomputing device 16 from the consensus network 36. The method continueswith step (4 a-4) where the cryptocurrency acceptance network computingdevice 16 releases the hold on the “y” amount of Flexacoin of stakeaccount 1. A block including information pertaining to releasing thehold on “y” amount of Flexacoin of stake account 1 is added to theFlexacoin blockchain. For simplicity, the block includes a headersection that includes a block number (e.g., block #3) and a transactionsection.

Concurrently with seeking desired confirmations in step (4 a-2) on FIG.2B, the method continues with step (4 b-1) on FIG. 2C where thecryptocurrency acceptance network computing device 16 sends the $10worth of cryptocurrency “aaa” sent by the payor computing device 12 tothe cryptocurrency exchange device(s) 18. The method continues with step(4 b-2) where the cryptocurrency exchange device(s) 18 convert the $10worth of cryptocurrency “aaa” sent by the payor computing device 12 to$10 of a desired currency (e.g., US dollars). Cryptocurrency exchange isdone quickly (e.g., 30 seconds to a few minutes) to account for exchangerate volatility.

The method continues with step (4 b-3) where the cryptocurrency exchangedevice(s) 18 deposit the $10 into a payee banking computing device 56associated with the payee computing device 14. Alternatively, thecryptocurrency exchange device(s) 18 deposit the $10 into a Flexabanking computing device 55 (e.g., a secure & trusted cryptocurrencyacceptance system 10 banking computing device) at step (4 b-3+) and theFlexa banking computing device 55 deposits the $10 into a payee bankingcomputing device 56 at step (4 b-3). The method continues with step (4b-4) where the payee banking computing device 56 sends a receipt of thedeposit of the $10 plus a transaction fee to the cryptocurrencyacceptance network computing device 16. The transaction fee is stored inthe transaction fee/rewards pool 80 of the stake pool unit 44 forrewards calculation and distribution.

FIG. 3 is a schematic block diagram of an example of an attemptedfraudulent transaction within the secure & trusted cryptocurrencyacceptance system 10. In this example, the payor computing device 12 isa bad actor attempting to “double spend” on the “aaa” cryptocurrencyblockchain 54. Referring to step (3 a) of FIG. 2A, where the payorcomputing device 12 transfers the $10 worth of cryptocurrency “aaa” tothe cryptocurrency acceptance network computing device 16 to completethe transaction with the payee computing device 14 (block #1 in gray),in this example, the payor computing 12 simultaneously adds block #1a tothe “aaa” cryptocurrency blockchain to send the same $10 worth ofcryptocurrency “aaa” to a different payee (e.g., “other payee”).

In this example, block #1a is mined by the consensus devices 1-10 of theconsensus network 36 and eventually receives 10 confirmations (e.g.,enough confirmations to confirm the payment to the different payee).Attempting a 51% attack on a proof-of-work blockchain, the payorcomputing device 12 attempts to mine block #1 in order to add a longerbranch to the “aaa” cryptocurrency blockchain than the block #1a chain.The longest version of the blockchain is considered to be valid by thenetwork consensus rules. Therefore, if payor computing device 12 issuccessful, the block #1a transaction would receive enough confirmationsto be confirmed (e.g., 10 in this example) but then would be abandonedby a self-mined longer branch for block #1 which would also beconfirmed.

However, mining blocks takes a significant amount of computing power andafter a certain amount of time, the payor computing device 12 cannotkeep up with other consensus devices in the consensus network 36. Inthis example, the payor computing device 12 is able to complete threeconfirmations of block #1 in the time it takes the other consensusdevices to complete ten confirmations of block #1a. Because the block#1a chain is longer, the consensus network 36 adopts it as correct andthe shorter chain for block #1 is abandoned.

FIG. 4 is a flowchart of an example of an attempted network attackwithin the secure & trusted cryptocurrency acceptance system 10. Asdescribed in the example of FIG. 3, the payor computing device 12attempts to double spend the $10 worth of cryptocurrency “aaa” on thecryptocurrency “aaa” blockchain 54. The payor computing device 12'sattempt to double spend is considered a network attack. The smallerbranch for block #1 is eventually abandoned by the “aaa” blockchain 54.As such, the cryptocurrency acceptance network computing device 16 doesnot receive the desired amount of confirmation results at step (4 a-3)with reference to the method of FIGS. 2A-2C.

The concurrent steps of (4 b-1) through (4 b-4) of FIG. 2C remainunchanged. However, the method continues with an alternative step (4a-4) where the cryptocurrency acceptance network computing device 16withdraws the “y” amount of Flexacoin from stake account 1. Theinformation pertaining to the withdrawal of “y” amount of Flexacoin ofstake account 1 is added to the stake pool smart contract and thenpublished to the blockchain. The contract may also include various otherinformation.

FIGS. 5A-5B are flowcharts of an example of a wallet authorizationfailure within the secure & trusted cryptocurrency acceptance system 10.Referring to the method of FIGS. 2A-2D, at some time after step (4 a-2)and prior to receiving the desired amount of confirmations at step (4a-3), in FIG. 5A, the cryptocurrency acceptance network computing device16 receives a financial transaction failure notification at alternativestep (4 a-3). For example, the transaction was erroneously authorizedvia fraud or software malfunction of the network cryptocurrency wallet46.

With the error discovered, the network cryptocurrency wallet 46 sendsthe financial transaction failure notification and seeks a return offunds. A transaction including information pertaining to return of “$10”worth of “aaa” cryptocurrency to wallet is added to the “aaa”blockchain. For simplicity, the block includes a header section thatincludes a block number (e.g., block #x) and a transaction section.

The method of FIG. 5A continues with an alternative step (4 a-4) wherethe cryptocurrency acceptance network computing device 16 withdraws the“y” amount of Flexacoin from stake account 1. A transaction includinginformation pertaining to withdrawing the “y” amount of Flexacoin fromstake account 1 is published to the blockchain. For simplicity, theblock includes a header section that includes a block number (e.g.,block #3) and a transaction section.

FIG. 5B operates similarly to FIG. 2C except that the method continueswith an alternative step of (4 b-1) where the cryptocurrency acceptancenetwork computing device 16 sends the “y” FXC to the cryptocurrencyexchange device(s) 18. The method continues with alternative step (4b-2) where the cryptocurrency exchange device(s) 18 convert the “y” FXCto $10. The method continues with step (4 b-3) where the cryptocurrencyexchange device(s) 18 deposit the $10 into a payee banking computingdevice 56 associated with the payee computing device 14.

Alternatively, the cryptocurrency exchange device(s) 18 deposit the $10into a Flexa banking computing device 55 (e.g., a secure & trustedcryptocurrency acceptance system 10 banking computing device) at step (4b-3+) and the Flexa banking computing device 55 deposits the $10 into apayee banking computing device 56 at step (4 b-3). The method continueswith step (4 b-4) where the payee banking computing device 56 sends areceipt of the deposit of the $10 plus a transaction fee to thecryptocurrency acceptance network computing device 16. The transactionfee is stored in the transaction fee/rewards pool 80 of the stake poolunit 44 for rewards calculation, conversion into Flexacoin, anddistribution.

FIG. 6 is a schematic block diagram of an embodiment of a stake poolunit 44 of the secure & trusted cryptocurrency acceptance system 10. Thestake pool unit 44 stores a plurality of stake accounts 1-n, includes astake account manager 52, and stores a transaction fee/rewards pool 80.The plurality of stake accounts 1-n store collateral cryptocurrency tosecure transactions within the secure & trusted cryptocurrencyacceptance system 10. For example, Flexacoin (FXC) is a token on theEthereum blockchain created for use as a system specific cryptocurrencywithin the secure & trusted cryptocurrency acceptance system 10 and isusable as collateral cryptocurrency. In order to be recognized by thesecure & trusted cryptocurrency acceptance system 10, a cryptocurrencywallet must be associated with a stake account that is backed withFlexacoin. An entity that pledges Flexacoin to a stake account isreferred to as a staking entity.

For example, a digital wallet developer creates an account with thecryptocurrency acceptance network computing device 16 in order for itswallet users to be a part of the secure & trusted cryptocurrencyacceptance system 10. As part of the account set up, the digital walletdeveloper must acquire a certain amount of collateral cryptocurrencyinto a stake account for purposes of backing the financial transactionsof its wallet users.

For example, the network cryptocurrency wallet 46-1 developer 60-1 hasdeveloped the network cryptocurrency wallet 46-1 for use by a pluralityof users 1-n. The network cryptocurrency wallet 46-1 developer 60-1 setsup an account with the cryptocurrency acceptance network computingdevice 16 which includes establishing stake account 1 for purposes ofbacking the transactions of users of the network cryptocurrency wallet46-1 (i.e., user 1-n's network cryptocurrency wallets 46-1). In thisexample, the network cryptocurrency wallet 46-1 developer 60-1 purchasesand deposits 1000 units of Flexacoin into stake account 1. Thus, thenetwork cryptocurrency wallet 46-1 developer 60-1 is the networkcryptocurrency wallet 46-1 staking entity 58-1.

As another example, a network cryptocurrency wallet 46-n developer 60-nhas developed the network cryptocurrency wallet 46-n for use by aplurality of users 1-n. The network cryptocurrency wallet 46-n developer60-n sets up an account with the cryptocurrency acceptance networkcomputing device 16 which includes establishing stake account n forpurposes of backing the transactions of users of the networkcryptocurrency wallet 46-n (i.e., users 1-n's network cryptocurrencywallets 46-n). In this example, the network cryptocurrency wallet 46-ndeveloper 60-n purchases and deposits 1900 units of Flexacoin into stakeaccount n. Additionally, an individual (e.g., a user computing device 1)purchases and deposits 100 units of Flexacoin into stake account n.Thus, the network cryptocurrency wallet 46-n developer 60-n and usercomputing device 1 are the network cryptocurrency wallet 46-n stakingentities 58-n.

The amount of Flexacoin purchased by a cryptocurrency wallet developerfor backing cryptocurrency wallet transactions is based on the amount ofusers of its cryptocurrency wallet, the amount of anticipated spendingby those users, projections of growth, etc. A cryptocurrency walletshould be “over-collateralized” so that its users can spend freely.

In exchange for pledging Flexacoin, staking entities are providedrewards such as a percentage back on successful transactions completedby their wallet's users. Because of the incentives provided, a varietyof staking entities (e.g., individual user computing devices, otherwallet developers) may wish to pledge collateral cryptocurrency into oneor more stake accounts.

The stake account manager 52 manages the plurality of stake accounts 1-nand includes an event log 62, a rewards calculation module 64, and stakeaccounts 1-n information 66 (“info”). The plurality of stake accounts1-n are “on-chain” smart contracts such as smart contracts on theEthereum blockchain (i.e., they are visible to everyone) but the stakeaccount manager 52 stores information and conducts activities“off-chain.” For example, the stake manager 52 maintains an event log 62of stake pool activities which includes tracking the total amount ofFlexacoin serving as collateral cryptocurrency in the stake pool unit 44at a given time. In this example, 100,000 units of Flexacoin are servingas collateral cryptocurrency (i.e., FXC pledged to stake accounts 1-n)in the stake pool unit 44. This entry is featured at the top of theevent log 62.

The event log 62 further includes entries for stake pool activities suchas deposits, withdrawals, holds, etc. In this example, starting witholder entries toward the bottom, the event log 62 includes an entry forthe network cryptocurrency wallet 46-1 developer 60-1 depositing 1000FXC into stake account 1. Next, the event log 62 shows that there was ahold placed on 100 units of FXC in stake account 1 leaving 900 units ofFXC available for backing network cryptocurrency wallet 46-1transactions. The most recent entry in the event log 62 states that thehold was released on the 100 units of FXC in stake account 1.

The stake accounts 1-n information 66 stores information pertaining tothe stake accounts 1-n such as how much FXC is available for backingtransactions associated with each stake account at a particular time.The stake accounts 1-n information 66 further includes rewardspercentages per successful transaction, terms of rewards withdrawals,transaction fee rates, etc. For example, payee computing devices may paydifferent transaction fees for successful transactions completed bydifferent network cryptocurrency wallets. Further, different stakeaccounts may have different rewards rates and rewards withdrawalpreferences.

While these are all contracted terms established by setting up a stakeaccount and/or the payee computing device 14 accounts with thecryptocurrency acceptance network computing device 16, it is importantto keep these terms confidential. For example, if published, payees(e.g., merchants) would be made aware of what every payee's transactionfee is, thus eliminating the secure & trusted cryptocurrency acceptancesystem 10's ability to contract on different terms. For example, wellestablished merchants may be provided a lower transaction fee as anincentive to join the secure & trusted cryptocurrency acceptance system10's. If that information is public, all payees would demand the samelow transaction fee.

Further, staking entities for one stake account may be provided adifferent rewards percentage compared to staking entities for anotherstake account. For example, staking entities of a stake account for ahighly reliable and widely used network cryptocurrency wallet may beprovided a higher rewards percentage than staking entities of a stakeaccount for a brand new network cryptocurrency wallet with less users.To allow for varying terms, confidential contract terms such as theabove examples are stored privately (i.e., not published on theblockchain smart contract) in the stake account manager 52.

The rewards calculation module 64 calculates the rewards owed to thestaking entities at a given time by accessing the stake accounts 1-ninformation 66, the transaction fee/rewards pool 80, and the event log62. For example, the stake accounts 1-n information 66 includes termsfor rewards withdrawals. Stake accounts 1-n terms for rewardswithdrawals may include one or more of: times of rewards withdrawals(e.g., automated (e.g., once a week), manual, etc.), whether the rewardswithdrawals can be on-chain or off-chain, identification of thoseauthorized to initiate a rewards withdrawal, etc. The rewardscalculation module 64 is discussed in more detail with reference toFIGS. 8-12.

FIG. 7 is a schematic block diagram of an embodiment of a stake accountsetup. A stake account is a blockchain smart contract such as a smartcontract on the Ethereum blockchain. A smart contract is computer codewritten to a blockchain or similar database implementation, andexecutable by network users. When an event outlined in the contract istriggered, the code executes. Therefore, a smart contract runs exactlyas programmed without any possibility of censorship, downtime, fraud, orthird party interference.

For example, the Ethereum blockchain is a distributed blockchain networkthat is able to run programming code of any decentralized applicationthrough the use of Turing complete software. An Ethereum block includesa header section 68 and a transaction section 70. The structure of theEthereum blockchain is similar to the structure of other traditionalblockchains such as Bitcoin in that it is a shared record of the entiretransaction history. However, an Ethereum block stores not onlytransactions that have been collected since the last block in theblockchain was mined (like in Bitcoin) but also the recent “state” ofeach smart contract. A consensus network (i.e., a network of miners) isresponsible for shifting the smart contract from state to state. Theheader section 68 includes these states in a root hash value (i.e., thestate root 72) which summarizes the state changes. The header section 68further includes other identifying information such as a block numberand a hash of a previous block.

The transaction section 70 in Ethereum includes a nonce (a uniquetransaction identifier), an address of a recipient account, a value, asending account's signature, code to be run (e.g., contract code 74),mining related fields (e.g., start gas and gas price), and possibly somedata (e.g., input values for the code). Here, the transaction section 70is shown as including the contract code 74 for simplicity.

When a cryptocurrency wallet developer wishes to have a cryptocurrencywallet associated with the secure & trusted cryptocurrency acceptancesystem 10, the cryptocurrency wallet developer sets up an account withthe cryptocurrency acceptance network computing device 16. The accountset-up includes establishing a stake account for the cryptocurrencywallet. To establish the stake account, a smart contract is written onthe Ethereum blockchain beginning with block #1 of FIG. 7.

For simplicity, the stake account creation begins with block #1 althoughnumerous blocks would proceed this block. The header section 68 of block#1 includes a state root 72 which includes a current summary of thestates of the accounts of the system. Here, state root 72 is empty forsimplicity. The transaction section 70 of block #1 includes contractcode 74 which includes code for creating a stake account address for thecryptocurrency wallet and associating the stake account address withcontract terms set by the staking entity and the cryptocurrencyacceptance network computing device 16.

The header section 68 of block #2 includes a hash of block #1 and astate root 72. The state root 72 includes information pertaining to thecurrent state of the stake account. For example, the state root 72 ofblock #2 states that the stake account was created for thecryptocurrency wallet (e.g., as block #1 is mined, the contract code 74of block #1 runs). The transaction section 70 of block #2 includescontract code 74 which includes instructions for making a deposit intothe stake account address in accordance with the contract terms. Forexample, the contract code 74 states that an address owned by thestaking entity is in possession of X units of Flexacoin (FXC) to depositinto the stake account address.

The header section 68 of block #3 includes a hash of block #2 and astate root 72. The state root 72 includes information pertaining to thecurrent state of the stake account. For example, the state root 72 ofblock #3 states that the stake account has X units of FXC deposited bythe staking entity. The transaction section 70 of block #3 includescontract code 74 which indicates that the stake account set up iscomplete.

FIG. 8 is a schematic block diagram of an embodiment of a stake poolunit 44 of the secure & trusted cryptocurrency acceptance system 10. Thestake pool unit 44 stores a plurality of stake accounts 1-n, includes astake account manager 52, and stores a transaction fee/rewards pool 80.The stake account manager 52 stores stake accounts 1-n information 66and event log 62 “off-chain.” The stake account manager 52 includes arewards calculation module 64 that is operable to calculate rewards owedto stake accounts 1-n and the staking entities associated with the stakeaccounts using the privately stored information.

The stake accounts 1-n information 66 store balance information 76-1through 76-n with includes how much Flexacoin (FXC) is available forbacking transactions, how much FXC is locked due to pendingtransactions, and how much FXC has been deposited as rewards.

The stake accounts 1-n information 66 further store rewards information78-1 through 78-n which includes rewards percentages per successfultransaction, terms of rewards withdrawals, transaction fee rates,staking entity rewards percentages, information pertaining to thesuccessful transactions that have occurred per payee at a given time(e.g., T), etc. For example, payees may pay different transaction feesfor successful transactions completed by different networkcryptocurrency wallets. Further, different payees may pay differenttransaction fees to the same network cryptocurrency wallets. Rewardsinformation 78-1 through 78-n also includes rewards deposit preferences.Rewards deposit preferences may include one or more of: times of rewardsdeposits (e.g., automated (e.g., once a week), manual, etc.), one ormore triggering events that initiate a rewards deposit, staking entityrewards percentages, etc.

The stake accounts 1-n information 66 further stores staking entityinformation 82-1 through 82-n such as identities of staking entitiesassociated with the stake account, staking entity permissions, stakingentity FXC withdrawal information (e.g., whether a withdrawal can beon-chain or off-chain, identification of those authorized to initiate awithdrawal, etc.), etc.

The transaction fee/rewards pool 80 includes deposited transaction fees84 paid by payees with every successful transaction. In the exampleshown, there is currently 50 units of deposited transaction fees 84 inthe transaction fee/rewards pool 80. The incoming transaction fees 84are pooled and used to purchase FXC to distribute as rewards 86. In theexample shown, the rewards balance 86 is 100 FXC. For example, thedeposited transaction fees 84 balance was previously higher, but aportion was used to purchase 100 units of FXC. Deposited transactionfees 84 may be converted to FXC for rewards based on a predeterminedtime (e.g., hourly) and/or a triggering event such as obtaining acertain amount of deposited transaction fees 84, a particular rewardsbalance 86 is reached, a rewards distribution is requested, etc. Rewardsare pooled in rewards balance 86 until a distribution of rewards occurs.

The rewards calculation module 64 determines to distribute rewards tothe stake accounts 1-n based on one or more of: a predetermined time(i.e., daily, weekly, etc.), a request by a staking entity (e.g.,through a stake account withdrawal request), and/or a triggering event.A triggering event includes one or more of: completion of a certainamount of successful transactions, reaching a certain amount of incomingtransaction fees, reaching a certain rewards balance 86, a stakingentity contract term, etc. When the rewards calculation module 64determines to distribute rewards, the rewards calculation module 64accesses the stake accounts 1-n information 66, the transactionfee/rewards pool 80, and the event log 62 to calculate the reward amountowed to each stake account.

In an example of operation, the rewards calculation module 64 determinesto distribute rewards and calculates the rewards owed to stake account 1at time T. The rewards calculation module 64 accesses one or more of thestake account 1 information 66-1 and the event log to determine that attime T, stake account 1 has backed transactions with payee 1 and payee2. As per stake account 1's rewards information 76-1, payee 1 has a 1%per successful transaction fee rate for successful transactions withstake account 1's network cryptocurrency wallet and payee 2 has a 2% persuccessful transaction fee rate for successful transactions with stakeaccount 1's network cryptocurrency wallet.

Further, from the rewards information 78-1, the rewards calculationmodule 64 determines that payee 1 has completed 500 units worth ofsuccessful transactions with stake account 1's network cryptocurrencywallet and payee 2 has completed 200 units worth of successfultransactions with stake account 1's network cryptocurrency wallet. Therewards calculation module 64 calculates that stake account 1 is owed 5units of FXC rewards based on payee 1 transactions and 4 units of FXCrewards based on payee 2 transactions. Therefore, from the 100 units ofFXC rewards available in the rewards balance 86, stake account 1 is owed9 units of FXC.

The rewards calculation module 64 performs a batched and securecalculation technique on the calculated reward amounts to produce abatched and secure rewards distribution summary. The batched and securerewards distribution summary ensures that each reward amount iscalculated correctly without disclosing the privately stored stakeaccount information.

For example, the rewards calculations for one or more stake accounts arebatched and compressed using a zero knowledge proof calculation. A zeroknowledge proof calculation allows for recipients of the proof to verifythat a portion is correct without knowing the details of the inputcalculation. The zero knowledge proof of rewards calculation 88 is usedto deposit rewards into stake accounts on a public blockchain (e.g.,into smart contracts on the Ethereum blockchain) without publishingconfidential details such as payee transaction fee rates, amount ofsuccessful transactions, etc.

FIG. 9 is a schematic block diagram of an example of a rewardsdistribution to one or more stake accounts. A stake account is ablockchain smart contract such as a smart contract on the Ethereumblockchain. An Ethereum block includes a header section 68 and atransaction section 70. The header section 68 includes these states in aroot hash value (i.e., the state root 72) which summarizes the statechanges of smart contracts. The header section 68 further includes otheridentifying information such as a block number and a hash of a previousblock.

The transaction section 70 in Ethereum includes a nonce (a uniquetransaction identifier), an address of a recipient account, a value, asending account's signature, code to be run (e.g., contract code 74),mining related fields (e.g., start gas and gas price), and possibly somedata (e.g., input values for the code). Here, the transaction section 70is shown as including the contract code 74 for simplicity.

When is it time to distribute rewards into one or more stake accounts(e.g., at a predetermined time (i.e., daily, weekly, etc.), a time basedon a certain amount of transactions, a time based on a certain amount ofincoming transaction fees, and/or a time based on a request by a stakingentity (e.g., through a stake account withdrawal request)) the stakeaccount manager calculates rewards owed and uses a zero knowledge proofof the rewards calculation to deposit rewards to the one or more stakeaccounts.

The rewards deposit begins with block #n. The header section 68 of block#n includes a hash of block #n−1 and a state root 72 which includes acurrent summary of the states of the accounts of the system. Forexample, the summary includes current balances of stake accounts of thesystem. As a specific example, the summary may include that stakeaccount 1 has a balance of 1000 FXC. The transaction section 70 of block#n includes contract code 74 which includes code for adding the rewardsto the one or more stake accounts via a batched zero knowledge proof ofrewards calculation. For example, the batched zero knowledge proof ofrewards calculation includes code to deposit 9 FXC into stake account 1(using the example of FIG. 8) as well as the proof itself to prove thatthe rewards are correct.

The header section 68 of block #n+1 includes a hash of block #n and astate root 72. The state root 72 includes information pertaining to thecurrent states of the one or more stake account. For example, the stateroot 72 of block #n+1 states that the stake account balances wereadjusted to include rewards (e.g., stake account 1 now has a balance of1009 FXC) and that the stake account include the zero knowledge proof ofrewards calculation to prove the rewards were calculated correctly. Thetransaction section 70 of block #n+1 includes contract code 74 whichindicates that the rewards deposits are complete.

FIG. 10 is a schematic block diagram of an embodiment of the stake poolunit 44 of the secure & trusted cryptocurrency acceptance system 10. Thestake pool unit 44 stores a plurality of stake accounts 1-n, includes astake account manager 52, and stores a transaction fee/rewards pool 80.The stake account manager 52 includes stake accounts 1-n information 66,rewards calculation module 64, and event log 62. (e.g., “off-chain”).The stake account manager 52 includes a rewards calculation module 64that is operable to calculate rewards owed to stake accounts 1-n and thestaking entities associated with the stake accounts using theinformation stored off-chain.

The stake accounts 1-n information 66 store balance information 76-1through 76-n with includes how much Flexacoin (FXC) is available forbacking transactions, how much FXC is locked due to pendingtransactions, and FXC deposited as rewards. The stake accounts 1-ninformation 66 further store rewards information 78-1 through 78-n whichincludes rewards percentages per successful transaction, terms ofrewards withdrawals, transaction fee rates, staking entity rewardspercentage, information pertaining to the successful transactions thathave occurred per payee at a given time (e.g., T), etc. For example,payees may pay different transaction fees for successful transactionscompleted by different network cryptocurrency wallets. Further,different payees may pay different transaction fees to the same networkcryptocurrency wallets.

Rewards information 78-1 through 78-n also includes rewards depositpreferences. Rewards deposit preferences may include one or more of:times of rewards deposits (e.g., automated (e.g., once a week), manual,etc.), one or more triggering events that initiate a rewards deposit,staking entity rewards percentages, etc. The stake accounts 1-ninformation 66 further stores staking entity information 82-1 through82-n such as identities of staking entities associated with the stakeaccount, staking entity permissions, staking entity withdrawalinformation 90 (e.g., whether a withdrawal can be on-chain or off-chain,identification of those authorized to initiate a withdrawal, etc.), etc.

The transaction fee/rewards pool 80 includes deposited transaction fees84 paid by payees with every successful transaction. In the exampleshown, there is currently 50 units of deposited transaction fees 84 inthe transaction fee/rewards pool 80. The incoming transaction fees 84are pooled and used to purchase FXC to distribute as rewards 86. In theexample shown, the rewards balance 86 is 100 FXC. For example, thedeposited transaction fees 84 balance was previously higher, but aportion was used to purchase 100 units of FXC. Deposited transactionfees 84 may be converted to FXC for rewards based on a predeterminedtime (e.g., hourly) and/or a triggering event such as obtaining acertain amount of deposited transaction fees 84, a particular rewardsbalance 86 is reached, a rewards distribution is requested, etc. Rewardsare pooled in rewards balance 86 until a distribution of rewards occurs.

As an example, the user computing device 1 requests a withdrawal ofrewards owed. With reference to the example of FIG. 6, stake account nis associated with two staking entities: the network cryptocurrencywallet 46-n developer 60-n and the user computing device 1. Therefore,in this example, stake account n information is shown. User computingdevice 1's withdrawal request may trigger a rewards distribution to thestake account n. In this example, rewards have already been distributedto the stake account n and the user computing device 1 requests awithdrawal for a portion of those deposited rewards. The distribution ofrewards to the stake account n may include calculating a stakingentity's portion and where that information is distributed within thezero knowledge proof calculation with the rewards deposit. In anotherembodiment, the stake account manager 52 calculates the percentage ofrewards owed to a staking entity upon a withdrawal request.

In response to user computing device 1's withdrawal request, the stakeaccount manager 52 accesses the user computing device withdrawal terms90-2 of stake account n's staking entity information 82-n. The stakingentity withdrawal information includes one or more of: whether awithdrawal can be on-chain or off-chain, how much can be withdrawn,times of withdrawal, and a type of FXC withdrawal (e.g., rewards, stake,etc.). The request from the user computing device 1 may specify aparticular amount or request a withdrawal of total rewards owed. Therequest may be to withdraw or to send the amount to anotheraddress/account.

If the withdrawal request is within the terms of the user computingdevice 1 withdrawal terms 90-2, the stake account manager 52 proceedswith the request by accessing the balance information 76-n and thereward information 78-n to calculate the percentage of rewards owed tothe user computing device 1. Alternatively, the stake account manager 52previously calculated the percentage of rewards owed to the usercomputing device 1 during the rewards distribution to stake account n.In that situation, the stake account manager 52 would deposit therewards according to that calculation.

When the stake account manager 52 has not previously calculated thepercentage of rewards owed to the user computing device 1 during therewards distribution to stake account n, the stake account manager 52calculates the percentage owed upon the approval of the request. Thestake account manager 52 accesses the balance information 76-n todetermine that stake account 1 currently stores 2100 units of FXC, where1900 units of the 2100 FXC were pledged by the network cryptocurrencywallet 46-n developer 60-n, 100 units of FXC were pledged by the usercomputing device 1, and 100 units of FXC have been deposited into stakeaccount n as rewards.

The stake account manager 52 further accesses the rewards information78-n to determine that the user computing device 1 awards percentage is5% of all stake account rewards. The user computing device 1's awardspercentage is a contracted term based on the amount of FXC pledged tothe stake account n. For example, in exchange for depositing 100 FXC instake account n, the user computing device 1 is offered 5% of stakeaccount rewards in return. Based on the user computing device 1 awardspercentage of 5%, the stake account manager 52 determines that therewards owed are 5 FXC (e.g., 5% of 100 FXC rewards).

If the withdrawal is authorized as on-chain, the stake account manager52 publishes the 5 FXC rewards withdrawal made by the user computingdevice 1's account to the blockchain. If the withdrawal is authorized asoff-chain, the stake account n balance is updated on-chain with thedetails of the withdrawal private. For example, the 5 units of FXC iswithdrawn from stake account n (on-chain), sent to an internal accountnot associated with the user computing device 1 (on-chain), converted toUS dollars (or other fiat currency), and transferred to a bankingaccount associated with the user computing device 1 (off-chain).

As another example, the user computing device 1 requests a withdrawal ofa specific amount (e.g., 115 FXC). The stake account manager 52 accessesthe user computing device withdrawal terms 90-2 to determine whether theuser computing device 1 is authorized to make a withdrawal, whether thetime of withdrawal is appropriate, and whether the withdrawal can be“on-chain.” If the withdrawal request is within the terms of the usercomputing device withdrawal terms 90-2, the stake account manager 52proceeds with the request by accessing the user computing device 1awards percentage (e.g., 5%) from reward information 78-n and thebalance information 76-n to determine the reward balance (e.g., 100 FXC)and the user computing device 1 deposit information.

Based on the user computing device 1 awards percentage of 5% and thereward balance of 100 FXC, the stake account manager 52 determines thatthe rewards owed to the user computing device 1 are 5 FXC (e.g., 5% of100 FXC rewards). The stake account manager 52 further determines thatthe user computing device 1 has deposited 100 FXC to the stake accountn, therefore the maximum withdrawal amount for the user computing device1 is 105 FXC.

Because the user computing device 1's withdrawal request for 115 FXC isunauthorized, the request is canceled. Alternatively, the stake accountmanager 52 returns an error message alerting the user computing deviceto the maximum withdrawal amount possible and queries the user computingdevice 1 as to whether it would like to adjust the amount requested tobe within that amount.

Alternatively, based on user computing device 1's contracted terms, itmay not be able to withdraw some or all of its initial deposit. Forexample, the 100 FXC deposit could be considered “non-refundable” andonly rewards withdrawals are possible. As another example, the usercomputing device 1 may have to wait until a certain amount of rewards(e.g., 20 FXC or more) are available in order to make a withdrawal ofrewards.

FIG. 11 is a schematic block diagram of an “on-chain” stake accountwithdrawal. A stake account is a blockchain smart contract such as asmart contract on the Ethereum blockchain. An Ethereum block includes aheader section 68 and a transaction section 70. The header section 68includes these states in a root hash value (i.e., the state root 72)which summarizes the state changes of smart contracts. The headersection 68 further includes other identifying information such as ablock number and a hash of a previous block.

The transaction section 70 in Ethereum includes a nonce (a uniquetransaction identifier), an address of a recipient account, a value, asending account's signature, code to be run (e.g., contract code 74),mining related fields (e.g., start gas and gas price), and possibly somedata (e.g., input values for the code). Here, the transaction section 70is shown as including the contract code 74 for simplicity.

Referring to the example of FIG. 10 where rewards have previously beendeposited into stake account n and the individual staking entity rewardshave not been previously calculated, the user computing device 1requests a withdrawal of rewards owed. The withdrawal request beginswith block #x. The header section 68 of block #x includes a hash ofblock #x−1 and a state root 72 which includes a current summary of thestates of the accounts of the system. For example, the summary includescurrent balances of stake accounts of the system and zero knowledgeproofs of rewards calculations. As a specific example, the summarystates that stake account n has a balance of 2100 units of FXC and azero knowledge proof of rewards calculation to prove that the 100 FXCdeposited as rewards were calculated correctly.

The transaction section 70 of block #x includes contract code 74 whichincludes code that the user computing device 1 is requesting awithdrawal of rewards from the stake account n and that the stakemanager needs to verify user computing device 1's withdrawal terms. Thestake account manager 52 accesses the user computing device 1 withdrawalterms to determine whether the user computing device is authorized tomake a rewards withdrawal, whether the time of withdrawal isappropriate, and whether the withdrawal can be “on-chain.”

The header section 68 of block #x+1 includes a hash of block #x and astate root 72. The state root 72 includes information pertaining to thecurrent states of the one or more stake account. For example, the stateroot 72 of block #n+1 states that stake account n has 2100 units of FXCand that user computing device 1's withdrawal was verified by the stakeaccount manager.

The transaction section 70 of block #x+1 includes contract code 74 whichindicates that the stake account manager 52 proceeds with the request bycalculating the rewards owed to the user computing device 1 and depositsthe rewards to the user computing device 1. To calculate the rewardsowed, the stake account manager accesses the user computing device 1awards percentage from reward information 78-n. Based on the usercomputing device 1 awards percentage of 5%, the stake account manager 52determines that the rewards owed are 5 FXC (e.g., 5% of 100 FXCrewards). In this example, the withdrawal is approved for “on-chain”therefore, the 5 units of FXC are deposited to the user computing device1.

The header section 68 of block #x+2 includes a hash of block #x+1 and astate root 72. The state root 72 includes information pertaining to thecurrent states of the one or more stake accounts. For example, the stateroot 72 of block #x+2 states that the stake account n balance wasadjusted to deduct the rewards owed to the user computing device 1(e.g., stake account n now has a balance of 2095 FXC) and that the usercomputing device 1 account now includes the 5 units of FXC. Thetransaction section 70 of block #x+2 includes contract code 74 whichindicates that the withdrawal is complete.

FIG. 12 is a flowchart of an example of a method of calculating stakeaccount rewards. The method begins with step 92 where a stake accountmanager (e.g., the rewards calculation module of the stake accountmanager) of the secure and trusted cryptocurrency acceptance systemdetermines to distribute rewards to one or more stake accounts of astake pool of the secure and trusted cryptocurrency acceptance system. Astake account of the one or more stake accounts is a smart contract on ablockchain (e.g., the Ethereum blockchain). The stake account isassociated with a network cryptocurrency wallet of the secure andtrusted cryptocurrency acceptance system. One or more staking entitiesstore system specific cryptocurrency (e.g., Flexacoin (FXC)) in thestake account for purposes of backing financial transactions of thenetwork cryptocurrency wallet within the secure and trustedcryptocurrency acceptance system.

The stake account manager determines to distribute rewards to the one ormore stake accounts based on one or more of: a predetermined time (i.e.,daily, weekly, etc.), a request by a staking entity (e.g., through astake account withdrawal request), and/or a triggering event. Atriggering event includes one or more of: completion of a certain amountof successful transactions, reaching a certain amount of incomingtransaction fees, reaching a certain rewards balance, a staking entitycontract term, etc.

The method continues with step 94 where the stake account managerobtains privately stored stake account information of the one or morestake accounts and a rewards balance of the stake pool. An amount oftransaction fees deposited into the stake pool are converted into thesystem specific cryptocurrency to produce rewards of the rewardsbalance. A transaction fee of the amount of transaction fees depositedinto the stake pool is deposited into the stake pool based on asuccessful financial transaction of the secure and trustedcryptocurrency acceptance system.

The privately stored stake account information includes balanceinformation, rewards information, staking entity information, and anevent log. The balance information includes how much system specificcryptocurrency is available for backing transactions, how much systemspecific cryptocurrency is locked due to pending transactions, and howmuch system specific cryptocurrency is deposited as rewards. The rewardsinformation includes rewards percentages per successful transaction,terms of rewards withdrawals, transaction fee rates, staking entityrewards percentage, information pertaining to the successfultransactions that have occurred per payee at a given time (e.g., T),etc. For example, payees may pay different transaction fees forsuccessful transactions completed by different network cryptocurrencywallets. Further, different payees may pay different transaction fees tothe same network cryptocurrency wallets.

Rewards information also includes rewards deposit preferences. Rewardsdeposit preferences may include one or more of: times of rewardsdeposits (e.g., automated (e.g., once a week), manual, etc.), one ormore triggering events that initiate a rewards deposit, staking entityrewards percentages, etc. Staking entity information includes identitiesof staking entities associated with the stake account, staking entitypermissions, staking entity withdrawal information (e.g., whether awithdrawal can be on-chain or off-chain, identification of thoseauthorized to initiate a withdrawal, etc.), etc.

The method continues with step 96 where the stake account managercalculates a reward amount of the rewards balance owed to each stakeaccount of the one or more stake accounts based on the privately storedstake account information. For example, the stake account manageraccesses the privately stored stake account information to determinethat at time T, a stake account has backed transactions with a firstpayee and a second payee. As per the stake account's rewardsinformation, the first payee has a 1% per successful transaction feerate for successful transactions with the stake account's networkcryptocurrency wallet and the second payee has a 2% per successfultransaction fee rate for successful transactions with stake account'snetwork cryptocurrency wallet.

Further, from the rewards information, the stake account managerdetermines that the first payee has completed 500 units worth ofsuccessful transactions with the stake account's network cryptocurrencywallet and the second payee has completed 200 units worth of successfultransactions with stake account's network cryptocurrency wallet. Thestake account manager calculates that the stake account is owed 5 unitsof FXC rewards based on first payee transactions and 4 units of FXCrewards based on second payee transactions. Therefore, the stake accountis owed 9 units of FXC. The stake account manager calculates rewards forother stake accounts similarly. The calculations may further include thesteps of determining how much each staking entity of a stake account isowed.

The method continues with step 98 where the stake account managerperforms a batched and secure calculation technique on the calculatedreward amounts to produce a batched and secure rewards distributionsummary. The batched and secure rewards distribution summary ensuresthat each reward amount is calculated correctly without disclosing theprivately stored stake account information. For example, the rewardscalculations for one or more stake accounts are batched and compressedusing a zero knowledge proof calculation. A zero knowledge proofcalculation allows for recipients of the proof to verify that a portionis correct without knowing the details of the calculation.

The method continues with step 100 where the stake account managerpublishes the batched and secure rewards distribution summary to theblockchain. The publishing deposits the calculated rewards into stakeaccounts (e.g., into smart contracts on the Ethereum blockchain) withoutpublishing confidential details such as payee transaction fee rates,amount of successful transactions, etc.

FIG. 13 is a schematic block diagram of another embodiment of the secure& trusted cryptocurrency acceptance system 10 that includes a payorcomputing device 12, a foreign payee computing device 102, acryptocurrency acceptance network computing device 16, one or moredomestic cryptocurrency exchange device(s) 18-1, one or more foreigncryptocurrency exchange device(s) 18-2, a database 20, and a consensusnetwork 36 that includes a plurality of consensus devices 1-n.

The secure & trusted cryptocurrency acceptance system 10 of FIG. 13operates similarly to the secure & trusted cryptocurrency acceptancesystem 10 of FIG. 1 except that the secure & trusted cryptocurrencyacceptance system 10 of FIG. 13 enables secure and trusted financialtransactions between a payor computing device 12 paying with acryptocurrency and a foreign payee computing device 102 accepting adesired currency (e.g., foreign fiat currency). The one or more foreigncryptocurrency exchange device(s) 18-2 are located in the samejurisdiction as the foreign payee computing device 102.

The foreign payee computing device 102 may be one or more computingdevices having an affiliation with a specific merchant identifier (ID).For example, the foreign payee computing device 102 is a point of sale(POS) device in a foreign retail store associated with a particularmerchant having the specific merchant ID. The foreign payee computingdevice 102 is associated with the cryptocurrency acceptance networkcomputing device 16. For example, the foreign payee computing device 102has an account with the cryptocurrency acceptance network computingdevice 16. The account setup establishes data application “c” 42 in theforeign payee computing device 102's memory 30 and includes instructionsfor securely receiving payments via the secure & trusted cryptocurrencyacceptance system 10.

The one or more domestic cryptocurrency exchange device(s) 18-1 and theone or more foreign cryptocurrency exchange device(s) 18-2 are speciallylicensed entities operable to convert cryptocurrency to a desiredcurrency (e.g., fiat currency, another cryptocurrency, etc.). In anembodiment, the one or more domestic cryptocurrency exchange device(s)18-1 and the one or more foreign cryptocurrency exchange device(s) 18-2are associated with one or more cryptocurrency holding companies thatare specially licensed to store sensitive materials and have insurancepolicies to protect against theft and fraud. In another embodiment, oneor more domestic cryptocurrency exchange device(s) 18-1 and the one ormore foreign cryptocurrency exchange device(s) 18-2 are standalonesecure devices.

Licensing, rules, and regulations for cryptocurrency exchange occursjurisdictionally meaning some cryptocurrencies may be exchangeable forother currencies in one jurisdiction (e.g., a country) but notrecognized for exchange in another. For example, Ether (thecryptocurrency of the Ethereum blockchain) may be exchanged for USdollars in the United States but outside of the United States it may notbe accepted for exchange into a foreign fiat currency. Likewise, theUnited States may not have cryptocurrency exchange devices licensed toexchange certain foreign cryptocurrencies for US dollars or othercryptocurrencies.

In order for a payor computing device 12 to conduct financialtransactions across jurisdictions, the secure & trusted cryptocurrencyacceptance system 10 implements a universally accepted cryptocurrencysettlement layer to process financial transactions.

In an example of operation, the payor computing device 12 establishes adirect communication link with the foreign payee computing device 102via the direct communication link 32. The payor computing device 12sends the foreign payee computing device 102 a request to initiatepurchase of a product or service using cryptocurrency stored in thenetwork cryptocurrency wallet 46. The cryptocurrency stored in thenetwork cryptocurrency wallet 46 is not recognized by the foreigncryptocurrency exchange device(s) 18-2 for exchange. The foreign payeecomputing device 102 accepts a desired currency (e.g., a foreign fiatcurrency, etc.).

The request to initiate purchase may be in the form of a split bar code,where the payor computing device 12 maintains one portion of a bar codeand the foreign payee computing device 102 maintains another portion ofa bar code such that when they are aligned in close proximity, theconveyance is initiated. Having a correct piece of a barcode from thepayor computing device 12 as well as the act of alignment, demonstratesintent to enter into a financial transaction (i.e., user authorization).As another example, the request is a secure handshake protocol betweenthe payor computing device 12 and foreign payee computing device 102.

When the request to initiate the financial transaction is approved bythe foreign payee computing device 102 (e.g., via the split bar codeexample), the payor computing device 12 receives an acknowledgement ofthe financial transaction (e.g., a one-time use code such as atransaction ID) from the foreign payee computing device 102. Theone-time use code is one or more of: a unique number, an alpha numeric,a function, and/or any item that uniquely connects the parties in thetransaction to the particular transaction. For example, the foreignpayee computing device 102 approves the request when the foreign payeecomputing device 102 is affiliated with the cryptocurrency acceptancenetwork computing device 16, the payor computing device 12 is a trustedcomputing device (e.g., by verification of ID, certificate, etc.), etc.

When a financial transaction is initiated by the payor computing device12 using the network cryptocurrency wallet 46, the cryptocurrencyacceptance network computing device 16 receives an acknowledgment of theinitiation of the financial transaction and a request to process thefinancial transaction. For example, the payor computing device 12 sendsthe request to process the financial transaction plus the one-time usecode to the cryptocurrency acceptance network computing device 16. Thecryptocurrency acceptance network computing device 16 places a hold onan amount of collateral cryptocurrency in a stake account of the stakepool unit 44 associated with the network cryptocurrency wallet 46.

When the amount of collateral cryptocurrency is placed on hold, thecryptocurrency acceptance network computing device 16 sends the payorcomputing device 12 an acknowledgment that the requisite amount ofcollateral cryptocurrency is on hold and the financial transaction canproceed. The payor computing device 102 is provided real time exchangerate information for the cryptocurrency to the desired currencyrequested by the foreign payee computing device 102.

The payor computing device 12 sends an amount of cryptocurrency equal tothe amount of desired currency requested by the foreign payee computingdevice 102 to the cryptocurrency acceptance network computing device 16.Sending the amount of cryptocurrency equal to the amount of desiredcurrency requested by the foreign payee computing device 102 to thecryptocurrency acceptance network computing device 16 is a transactionadded to the cryptocurrency blockchain of the cryptocurrency used by thepayor computing device 12.

Alternatively, or additionally, the foreign payee computing device 102sends a notice of the financial transaction which includes the amount ofdesired currency requested (e.g., an amount of foreign fiat currency) tothe cryptocurrency acceptance network computing device 16. Thecryptocurrency acceptance network computing device 16 sends the payorcomputing device 12 a network transaction acknowledgement that theamount of cryptocurrency has been received and is covered by the amountof collateral cryptocurrency placed on hold.

Alternatively, when the amount of desired currency requested is morethan the amount of collateral cryptocurrency on hold, the cryptocurrencyacceptance network computing device 16 may place further collateralcryptocurrency on hold equal to the amount of desired currency requestedif allowed (e.g., by the terms of the stake account associated with thenetwork cryptocurrency wallet 46). If not allowed, the cryptocurrencyacceptance network computing device 16 cancels the transaction beforethe transaction is finalized between the payor computing device 12 andthe foreign payee computing device 102.

The payor computing device 12 sends the foreign payee computing device102 a notification to finalize the transaction. The notification tofinalize the transaction includes the network transactionacknowledgement information from the cryptocurrency acceptance networkcomputing device 16 (e.g., the amount of cryptocurrency has beenreceived and is covered by the amount of collateral cryptocurrencyplaced on hold) such that the foreign payee computing device 102 canclose the financial transaction knowing that the desired funds willarrive.

The cryptocurrency acceptance network computing device 16 seeks adesired number of confirmations of payor computing device 12'scryptocurrency payment from the consensus network 20. The desired numberof confirmations corresponds to the type of cryptocurrency used. Receiptof the desired number of confirmations may take minutes to hours oftime.

The cryptocurrency acceptance network computing device 16 adjusts theamount of collateral cryptocurrency on hold to equal the amount ofdesired currency requested when the amount of desired currency requestedis less than the amount of collateral cryptocurrency on hold.

Concurrently to seeking desired confirmations, the cryptocurrencyacceptance network computing device 16 sends the amount ofcryptocurrency sent by the payor computing device 12 to the domesticcryptocurrency exchange device(s) 18-1. The domestic cryptocurrencyexchange device(s) 18-1 convert the amount of cryptocurrency sent by thepayor computing device 12 to an amount of universally acceptedcryptocurrency equal to the amount of desired currency requested by theforeign payee computing device 102.

The universally accepted cryptocurrency is a cryptocurrency that isaccepted and recognized for exchange by all cryptocurrency exchangesassociated with the secure & trusted cryptocurrency acceptance system10. For example, the universally accepted cryptocurrency is Bitcoin(BTC). Converting cryptocurrency to a universally acceptedcryptocurrency allows a payor computing device to transact with payeecomputing devices across jurisdictions with varying laws and regulationsregarding cryptocurrencies. The domestic cryptocurrency exchangedevice(s) 18-1 send the amount of universally accepted cryptocurrencyequal to the amount of desired currency to the foreign cryptocurrencyexchange device(s) 18-2.

The foreign cryptocurrency exchange device(s) 18-2 are located in thesame jurisdiction as the foreign payee computing device 102 and convertthe amount of universally accepted cryptocurrency to the amount ofdesired requested by the foreign payee computing device 102.Cryptocurrency exchange is done quickly (e.g., 30 seconds to a fewminutes) to account for exchange rate volatility. The foreigncryptocurrency exchange device(s) 18-2 deposit the amount equal to theamount of desired currency requested by the foreign payee computingdevice 102 into a foreign payee banking computing device associated withthe foreign payee computing device 102.

When the desired number of confirmations are received by thecryptocurrency acceptance network computing device 16 from the consensusnetwork 36, the cryptocurrency acceptance network computing device 16releases the hold on the amount of collateral cryptocurrency. Iffraudulent activity occurs (e.g., the payor computing device actsmaliciously to spend at two payee computing devices simultaneously, thesoftware of the network cryptocurrency wallet 46 is corrupted, etc.) thecryptocurrency acceptance network computing device 16 withdraws thecollateral cryptocurrency on hold from the stake account.

As another example, if the payor computing device 12 sends anunauthorized cryptocurrency payment to the cryptocurrency acceptancenetwork computing device 16 through an error in the software of thenetwork cryptocurrency wallet 46, the error may be recognized by thepayor computing device 12's network cryptocurrency wallet 46 afterfinalization of the transaction with the foreign payee computing device102 but prior to the cryptocurrency acceptance network computing device16 receiving the desired amount of confirmations.

In that situation, the network cryptocurrency wallet 46 sends afinancial transaction failure notification to the cryptocurrencyacceptance network computing device 16, the amount of cryptocurrencyspent is requested back, and the cryptocurrency acceptance networkcomputing device 16 withdraws the amount of collateral cryptocurrency onhold to cover the transaction that occurred with the foreign payeecomputing device 102. The universally accepted cryptocurrency settlementlayer will be discussed in more detail with reference to FIGS. 14A-16.

FIGS. 14A-14C are flowcharts of an example of a method of a financialtransaction of the secure & trusted cryptocurrency acceptance system 10of FIG. 13. The method begins on FIG. 14A with step (1 a) where thepayor computing device 12 establishes a direct communication link withthe foreign payee computing device 102 to initiate a financialtransaction. The payor computing device 12's network cryptocurrencywallet 46 is storing 100 units of a cryptocurrency (CC) “aaa.”Cryptocurrency “aaa” may be any type of cryptocurrency approved forexchange by the one or more domestic cryptocurrency exchange device(s)18-1. In this example, the payor computing device 12 wishes to pay theforeign payee computing device 102 using cryptocurrency “aaa,” but theforeign payee computing device 102 accepts foreign fiat currency (e.g.,Canadian dollars). Further, the one or more foreign cryptocurrencyexchange device(s) 18-2 in the jurisdiction of the foreign payeecomputing device 102 do not recognize cryptocurrency “aaa” for exchange.

The request to initiate purchase at step (1 a) may be in the form of asplit bar code, where the payor computing device 12 maintains oneportion of a bar code and the foreign payee computing device 102maintains another portion of a bar code such that when they are alignedin close proximity, the conveyance is initiated. Having a correct pieceof a barcode from the payor computing device 12 as well as the act ofalignment, demonstrates intent to enter into a financial transaction(i.e., user authorization). As another example, the request is a securehandshake protocol between the payor computing device 12 and the foreignpayee computing device 102.

The method continues at step (1 b) where the payor computing device 12receives an acknowledgement of the financial transaction (e.g., aone-time use code such as a transaction ID) from the foreign payeecomputing device 102. The one-time use code is one or more of: a uniquenumber, an alpha numeric, a function, and/or any item that uniquelyconnects the parties in the transaction to the particular transaction.For example, the foreign payee computing device 102 approves the requestwhen the foreign payee computing device 102 is associated with thecryptocurrency acceptance network computing device 16 and the terms ofthe transaction are valid.

The method continues at step (2 a) where, when a financial transactionis initiated by the payor computing device 12 using the networkcryptocurrency wallet 46, the cryptocurrency acceptance networkcomputing device 16 receives an acknowledgment of the initiation of thefinancial transaction and a request to process the financialtransaction. For example, the payor computing device 12 sends therequest to process the financial transaction plus the one-time use codeto the cryptocurrency acceptance network computing device 16.

The cryptocurrency acceptance network computing device 16 includes thestake pool unit 44. The stake pool unit 44 includes a plurality of stakeaccounts 1-n. Staking entities (e.g., wallet developers, individuals,etc.) pledge an amount of Flexacoin (FXC) cryptocurrency to a stakeaccount for purposes of backing financial transactions of acryptocurrency wallet's users (i.e., collateral cryptocurrency).Flexacoin cryptocurrency is a token on the Ethereum blockchain developedspecifically for use within the secure & trusted cryptocurrencyacceptance system 10 as a collateral utility token. A more detaileddiscussion of the stake pool unit 44 and the plurality of stake accounts1-n is disclosed with reference to FIGS. 6-12.

In order for a cryptocurrency wallet to be recognized by the secure &trusted cryptocurrency acceptance system 10, the cryptocurrency walletmust be associated with a stake account of the stake pool unit 44. Inthis example, the network cryptocurrency wallet 46 is associated withstake account 1. For example, the digital wallet developer of thenetwork cryptocurrency wallet 46 and possibly one or more other stakingentities have deposited 1000 units of Flexacoin in stake account 1 toback financial transactions of users of the network cryptocurrencywallet 46.

At step (2 b), the cryptocurrency acceptance network computing device 16places a hold on an amount of Flexacoin in stake account 1. In thisexample, 100 units of cryptocurrency “aaa” worth of Flexacoin (e.g., thetotal amount of cryptocurrency stored in the network cryptocurrencywallet 46) of the 1000 units of amount of Flexacoin in the stake account1 is placed on hold to back the financial transaction. The 100 units ofcryptocurrency “aaa” worth of Flexacoin is referred to as “X” amount ofFlexacoin for simplicity.

For example, if cryptocurrency “aaa” and Flexacoin have a one-to-oneconversion, “X” equals 100 units and there is now 900 units of Flexacoinavailable in stake account 1 to back financial transactions of otherusers of the network cryptocurrency wallet 46. The informationpertaining to the hold on “X” amount of Flexacoin of stake account 1 isadded to the stake pool smart contract. Transactions within the smartcontract include the data required to publish the state of the stakepool transactions to the blockchain. The contract may also includevarious other information.

The method continues with step (2 c), where, when the “X” amount ofFlexacoin is placed on hold, the cryptocurrency acceptance networkcomputing device 16 sends the payor computing device 12 anacknowledgment that the requisite amount of collateral cryptocurrency ison hold and the financial transaction can proceed. If the requisiteamount of collateral cryptocurrency cannot be placed on hold (e.g., thestake account does not have enough collateral cryptocurrency available)the cryptocurrency acceptance network computing device 16 sends thepayor computing device 12 an error notification and cancels thefinancial transaction at step (2 c).

The method continues with step (3 a) where the payor computing device 12sends the amount of cryptocurrency “aaa” equal to the amount of foreignfiat currency requested by the foreign payee computing device 102 to thecryptocurrency acceptance network computing device 16. In this example,the foreign payee computing device 102 is requesting 10 Canadian dollars(CAD). A block including information pertaining to transfer of “10 CAD”worth of “aaa” cryptocurrency is added to the “aaa” blockchain. Theblock includes a header section and a transaction section. The headersection includes a block number (e.g., block #y) plus a hash of theprevious block (not shown). The header section and/or the transactionsection may include various other information.

The transaction information of the block includes the payment amount,the address of the sender (the payor computing device 12), and theaddress of the recipient (the cryptocurrency acceptance networkcomputing device 16). Thus, by using the secure & trusted cryptocurrencyacceptance system 10, confidential payee related information (e.g.,revenue, items being sold, consumer spending behavior, etc.) andconfidential payor related information (e.g., consumer identity, itemspurchased, amount spent, merchants frequented, etc.) is private (i.e.,not published on the blockchain for anyone to see).

Alternatively, or additionally, the foreign payee computing device 102sends a notice of the financial transaction which includes the amount ofdesired currency requested (e.g., an amount of Canadian dollars) to thecryptocurrency acceptance network computing device 16 at step (3 a+).The method continues with step 3(b) where the cryptocurrency acceptancenetwork computing device 16 sends the payor computing device 12 anetwork transaction acknowledgement that the amount of cryptocurrencyreceived is covered by the amount of collateral cryptocurrency placed onhold.

Alternatively, if the amount of cryptocurrency received is not coveredby the amount of collateral cryptocurrency placed on hold, thecryptocurrency acceptance network computing device 16 may cancel thetransaction at 3(b) or place a further amount of Flexacoin on hold tocover the transaction at 3(b) depending on the terms of stake account 1.

In this example, the entire balance of the network cryptocurrency wallet46 worth of Flexacoin is placed on hold so the payor computing device 12would not be able to spend more than the amount placed on hold. However,in other examples where the amount of collateral cryptocurrency placedon hold is based on other factors (e.g., merchant ID, typicaltransaction amounts, etc.), the payor computing device 12 may initiate atransaction for more than what is placed on hold. The terms of the stakeaccount 1 indicate how to proceed in such cases. For example, the stakeaccount 1 may indicate that a user of the network cryptocurrency wallet46 has a particular spending cap on any individual purchase. Any requestthat requires a hold on over the spending cap is rejected. However, fora request equal to or lower than the spending cap, additional collateralcryptocurrency is placed on hold so that the transaction can proceed.

The method continues with step 3(c) where the payor computing device 12sends the foreign payee computing device 102 a notification to finalizethe transaction. The notification to finalize the transaction includesthe network transaction acknowledgement information from thecryptocurrency acceptance network computing device 16 (e.g., the amountof cryptocurrency has been received and is covered by the amount ofcollateral cryptocurrency placed on hold) such that the foreign payeecomputing device 102 can close the financial transaction knowing thatthe desired funds will arrive.

The method continues on FIG. 14B with step (4 a-1) where thecryptocurrency acceptance network computing device 16 seeks a desirednumber of confirmations of block #y added to the “aaa” blockchain 54from the consensus network 36. The consensus network 36 includes aplurality of consensus devices 1-n. For example, in the Bitcoinblockchain, miners record new transactions into blocks that verify allprevious transactions within the blockchain. On average, it takes aminer ten minutes to write a block on the Bitcoin blockchain and theaverage block time depends on a total hash power of the Bitcoin network.

The desired number of confirmations corresponds to the type ofcryptocurrency used. As shown here, the cryptocurrency acceptancenetwork computing device 16 requires “n” confirmations before block #1on the “aaa” blockchain 54 is considered confirmed. Receipt of thedesired number of confirmations may take minutes to hours of time.However, because every financial transaction is backed with Flexacoin ascollateral, the cryptocurrency acceptance network computing device 16proceeds with the financial transaction and trusts that the desiredamount of confirmations will be received.

The method continues at step (4 a-2) where the cryptocurrency acceptancenetwork computing device 16 adjusts the X amount of Flexacoin on hold toequal 10 CAD worth of Flexacoin. 10 CAD worth of Flexacoin is referredto as “y” amount of Flexacoin for simplicity. For example, when theconversion rate between Flexacoin and Canadian dollars is one-to-one,and X is equal to 100, the cryptocurrency acceptance network computingdevice 16 releases the hold on 90 units of Flexacoin (i.e., “X-y”) suchthat only 10 units of Flexacoin are on hold. The information pertainingto releasing the hold on “X-y” amount of Flexacoin of stake account 1 isadded to the stake pool smart contract. Transactions within the smartcontract include the data required to publish the state of the stakepool transactions to the blockchain. The contract may also includevarious other information.

The method continues with step (4 a-3) where the desired number ofconfirmations are received by the cryptocurrency acceptance networkcomputing device 16 from the consensus network 36. The method continueswith step (4 a-4) where the cryptocurrency acceptance network computingdevice 16 releases the hold on the “y” amount of Flexacoin of stakeaccount 1. A block including information pertaining to releasing thehold on “y” amount of Flexacoin of stake account 1 is added to theFlexacoin blockchain. For simplicity, the block includes a headersection that includes a block number (e.g., block #y+2) and atransaction section.

Concurrently with seeking desired confirmations in step (4 a-2) on FIG.14B, the method continues with step (4 b-1) on FIG. 14C where thecryptocurrency acceptance network computing device 16 sends the 10 CADworth of cryptocurrency “aaa” sent by the payor computing device 12 tothe domestic cryptocurrency exchange device(s) 18-1. The methodcontinues with step (4 b-2) where the domestic cryptocurrency exchangedevice(s) 18-1 convert the 10 CAD worth of cryptocurrency “aaa” sent bythe payor computing device 12 to a universally accepted cryptocurrency.For example, the universally accepted cryptocurrency is Bitcoin (BTC).

The method continues with step (4 b-3) where the domestic cryptocurrencyexchange device(s) 18-1 sends the 10 CAD worth of universally acceptedcryptocurrency (BTC) to the foreign cryptocurrency exchange device(s)18-2. The method continues with step (4 b-4) where the foreigncryptocurrency exchange device(s) 18-2 convert the 10 CAD worth ofuniversally accepted cryptocurrency (BTC) to 10 CAD. Cryptocurrencyexchange is done quickly (e.g., seconds to a few minutes) to account forexchange rate volatility. The exchange can also be performed in realtime on a credit-based account to eliminate any pricing volatility.Further, the payor computing device 12 is made are aware of the exchangerate for “aaa” CC to Canadian dollars in real time.

The method continues with step (4 b-5), where the foreign cryptocurrencyexchange device(s) 18-2 deposit the 10 CAD into a foreign payee bankingcomputing device 104 associated with the foreign payee computing device102. Alternatively, the foreign cryptocurrency exchange device(s) 18-2deposit the 10 CAD into a Flexa banking computing device 55 (e.g., asecure & trusted cryptocurrency acceptance system 10 banking computingdevice) and the Flexa banking computing device 55 deposits the 10 CADinto the foreign payee banking computing device 104. The methodcontinues with step (4 b-6) where the foreign payee banking computingdevice 104 sends a receipt of the deposit of the 10 CAD plus atransaction fee to the cryptocurrency acceptance network computingdevice 16. The transaction fee is stored in the transaction fee/rewardspool 80 of the stake pool unit 44 for rewards calculation anddistribution.

FIG. 15 is a schematic block diagram of an embodiment of a worldwidenetwork of cryptocurrency exchange devices of the secure & trustedcryptocurrency acceptance system 10 that includes cryptocurrencyexchange devices 1-5 located in jurisdictions 1-5. A cryptocurrencyexchange device is operable to convert one or more cryptocurrencies toother currencies (e.g., fiat currencies or other cryptocurrencies).Licensing, rules, and regulations for cryptocurrency exchange occursjurisdictionally meaning some cryptocurrencies may be exchangeable forother currencies in one jurisdiction (e.g., a country) but notrecognized for exchange in another.

For example, in jurisdiction 1, cryptocurrency exchange device 1recognizes and is operable to convert the following currencies: “aaa”cryptocurrency (CC), “bbb” cryptocurrency (CC), local fiat currency, andBitcoin (BTC). In jurisdiction 2, cryptocurrency exchange device 2recognizes and is operable to convert the following currencies: “aaa”cryptocurrency (CC), “ddd” cryptocurrency (CC), local fiat currency, andBitcoin (BTC). In jurisdiction 3, cryptocurrency exchange device 3recognizes and is operable to convert the following currencies: “abc”cryptocurrency (CC), “eee” cryptocurrency (CC), local fiat currency, andBitcoin (BTC). In jurisdiction 4, cryptocurrency exchange device 4recognizes and is operable to convert the following currencies: “aaa”cryptocurrency (CC), “ggg” cryptocurrency (CC), local fiat currency, andBitcoin (BTC). In jurisdiction 5, cryptocurrency exchange device 5recognizes and is operable to convert the following currencies: “bbb”cryptocurrency (CC), “edd” cryptocurrency (CC), “xyz” cryptocurrency(CC), local fiat currency, and Bitcoin (BTC).

While there is some overlap in what currencies are recognized acrossjurisdictions (e.g., jurisdictions 1, 2, and 4 recognize “aaa” CC), aproblem occurs when a payor from one jurisdiction wishes to transactwith a payee in another jurisdiction using a currency that is notrecognized for exchange in the payee's jurisdiction. For example, apayor from jurisdiction 5 wishes to pay a payee from jurisdiction 1using “xyz” CC. Cryptocurrency exchange device 1 does not recognize oraccept “xyz” CC for exchange.

To solve this problem, when a financial transaction occurs between apayor using a cryptocurrency and a payee in a jurisdiction that cannotexchange the cryptocurrency, the cryptocurrency exchange device in thepayor's jurisdiction first converts the cryptocurrency to a universallyaccepted cryptocurrency (e.g., Bitcoin (BTC)). A cryptocurrency exchangein the payee's jurisdiction is then operable to convert the universallyaccepted cryptocurrency to the desired currency of the payee. Forexample, the cryptocurrency exchange device 5 converts the “xyz” CC touniversally accepted cryptocurrency BTC and sends the BTC to thecryptocurrency exchange device 1. The cryptocurrency exchange device 1converts the BTC to the desired currency of the payee (e.g., local fiatcurrency).

This multiple-step conversion is referred to as a universally acceptedcryptocurrency settlement layer of the secure & trusted cryptocurrencyacceptance system 10. The universally accepted cryptocurrency settlementlayer is shown here as the arrows between jurisdictions indicating thata universally accepted cryptocurrency (e.g., Bitcoin (BTC)) can beexchanged across jurisdictions 1-5 for conversion to whatever currenciesare accepted by a particular jurisdiction. The universally acceptedcryptocurrency settlement layer allows for fast, trusted, and securecryptocurrency transactions worldwide.

As long as a jurisdiction has a cryptocurrency exchange that isassociated with the secure & trusted cryptocurrency acceptance system 10(e.g., via an account with the cryptocurrency acceptance network device16) that accepts the universally accepted cryptocurrency for exchange,cryptocurrency financial transactions initiated usingunrecognized/foreign cryptocurrencies can occur there.

FIG. 16 is a schematic block diagram of another embodiment of the secure& trusted cryptocurrency acceptance system 10 that includes a domesticpayor computing device 12, the cryptocurrency acceptance networkcomputing device 16, one or more domestic cryptocurrency exchangedevice(s) 18-1, a plurality of domestic payees computing devices 14-1through 14-n, a plurality of domestic payee banking devices 56-1 through56-n, one or more foreign cryptocurrency exchange device(s) 18-2, aplurality of foreign payee computing devices 102-1 through 102-n, and aplurality of foreign payee banking computing devices 104-1 through104-n.

The cryptocurrency acceptance network computing device 16 is associatedwith the domestic payor computing device 12, the one or more domesticcryptocurrency exchange device(s) 18-1, the one or more domesticcryptocurrency exchange device(s) 18-1, the plurality of domestic payeescomputing devices 14-1 through 14-n, the plurality of domestic payeebanking devices 56-1 through 56-n the plurality of foreigncryptocurrency exchange devices 1-n, the plurality of foreign payeecomputing devices 1-n, and the plurality of foreign payee bankingcomputing devices 1-n.

The network created by the cryptocurrency acceptance network computingdevice 16 associations allows for the domestic payor computing device 12to engage in fast, easy, and reliable financial transactions withdomestic payee computing devices and foreign payee computing devices.This is achieved through the universally accepted cryptocurrencysettlement layer discussed in FIGS. 13-15.

While engaging in financial transactions outside of the domestic payorcomputing device 12's country with one or more of the foreign payeedevices 102-1 through 102-n, the domestic payor computing device 102 isprovided real time exchange rates through the connection of the domesticand foreign cryptocurrency exchange devices via the cryptocurrencyacceptance network computing device 16.

The methods of the secure & trusted cryptocurrency acceptance system 10(e.g., the stake pool, the universally accepted cryptocurrencysettlement layer, etc.) allow for replicability and scalability of thesecure & trusted cryptocurrency acceptance system 10 across a pluralityof jurisdictions worldwide.

As may also be used herein, the term(s) “configured to”, “operablycoupled to”, “coupled to”, and/or “coupling” includes direct couplingbetween items and/or indirect coupling between items via an interveningitem (e.g., an item includes, but is not limited to, a component, anelement, a circuit, and/or a module) where, for an example of indirectcoupling, the intervening item does not modify the information of asignal but may adjust its current level, voltage level, and/or powerlevel. As may further be used herein, inferred coupling (i.e., where oneelement is coupled to another element by inference) includes direct andindirect coupling between two items in the same manner as “coupled to”.

As may even further be used herein, the term “configured to”, “operableto”, “coupled to”, or “operably coupled to” indicates that an itemincludes one or more of power connections, input(s), output(s), etc., toperform, when activated, one or more its corresponding functions and mayfurther include inferred coupling to one or more other items. As maystill further be used herein, the term “associated with”, includesdirect and/or indirect coupling of separate items and/or one item beingembedded within another item.

As may be used herein, the term “compares favorably”, indicates that acomparison between two or more items, signals, etc., provides a desiredrelationship. For example, when the desired relationship is that signal1 has a greater magnitude than signal 2, a favorable comparison may beachieved when the magnitude of signal 1 is greater than that of signal 2or when the magnitude of signal 2 is less than that of signal 1. As maybe used herein, the term “compares unfavorably”, indicates that acomparison between two or more items, signals, etc., fails to providethe desired relationship.

As may be used herein, one or more claims may include, in a specificform of this generic form, the phrase “at least one of a, b, and c” orof this generic form “at least one of a, b, or c”, with more or lesselements than “a”, “b”, and “c”. In either phrasing, the phrases are tobe interpreted identically. In particular, “at least one of a, b, and c”is equivalent to “at least one of a, b, or c” and shall mean a, b,and/or c. As an example, it means: “a” only, “b” only, “c” only, “a” and“b”, “a” and “c”, “b” and “c”, and/or “a”, “b”, and “c”.

As may also be used herein, the terms “processing module”, “processingcircuit”, “processor”, “processing circuitry”, and/or “processing unit”may be a single processing device or a plurality of processing devices.Such a processing device may be a microprocessor, micro-controller,digital signal processor, microcomputer, central processing unit, fieldprogrammable gate array, programmable logic device, state machine, logiccircuitry, analog circuitry, digital circuitry, and/or any device thatmanipulates signals (analog and/or digital) based on hard coding of thecircuitry and/or operational instructions. The processing module,module, processing circuit, processing circuitry, and/or processing unitmay be, or further include, memory and/or an integrated memory element,which may be a single memory device, a plurality of memory devices,and/or embedded circuitry of another processing module, module,processing circuit, processing circuitry, and/or processing unit. Such amemory device may be a read-only memory, random access memory, volatilememory, non-volatile memory, static memory, dynamic memory, flashmemory, cache memory, and/or any device that stores digital information.Note that if the processing module, module, processing circuit,processing circuitry, and/or processing unit includes more than oneprocessing device, the processing devices may be centrally located(e.g., directly coupled together via a wired and/or wireless busstructure) or may be distributedly located (e.g., cloud computing viaindirect coupling via a local area network and/or a wide area network).Further note that if the processing module, module, processing circuit,processing circuitry and/or processing unit implements one or more ofits functions via a state machine, analog circuitry, digital circuitry,and/or logic circuitry, the memory and/or memory element storing thecorresponding operational instructions may be embedded within, orexternal to, the circuitry comprising the state machine, analogcircuitry, digital circuitry, and/or logic circuitry. Still further notethat, the memory element may store, and the processing module, module,processing circuit, processing circuitry and/or processing unitexecutes, hard coded and/or operational instructions corresponding to atleast some of the steps and/or functions illustrated in one or more ofthe Figures. Such a memory device or memory element can be included inan article of manufacture.

One or more embodiments have been described above with the aid of methodsteps illustrating the performance of specified functions andrelationships thereof. The boundaries and sequence of these functionalbuilding blocks and method steps have been arbitrarily defined hereinfor convenience of description. Alternate boundaries and sequences canbe defined so long as the specified functions and relationships areappropriately performed. Any such alternate boundaries or sequences arethus within the scope and spirit of the claims. Further, the boundariesof these functional building blocks have been arbitrarily defined forconvenience of description. Alternate boundaries could be defined aslong as the certain significant functions are appropriately performed.Similarly, flow diagram blocks may also have been arbitrarily definedherein to illustrate certain significant functionality.

To the extent used, the flow diagram block boundaries and sequence couldhave been defined otherwise and still perform the certain significantfunctionality. Such alternate definitions of both functional buildingblocks and flow diagram blocks and sequences are thus within the scopeand spirit of the claims. One of average skill in the art will alsorecognize that the functional building blocks, and other illustrativeblocks, modules and components herein, can be implemented as illustratedor by discrete components, application specific integrated circuits,processors executing appropriate software and the like or anycombination thereof.

In addition, a flow diagram may include a “start” and/or “continue”indication. The “start” and “continue” indications reflect that thesteps presented can optionally be incorporated in or otherwise used inconjunction with one or more other routines. In addition, a flow diagrammay include an “end” and/or “continue” indication. The “end” and/or“continue” indications reflect that the steps presented can end asdescribed and shown or optionally be incorporated in or otherwise usedin conjunction with one or more other routines. In this context, “start”indicates the beginning of the first step presented and may be precededby other activities not specifically shown. Further, the “continue”indication reflects that the steps presented may be performed multipletimes and/or may be succeeded by other activities not specificallyshown. Further, while a flow diagram indicates a particular ordering ofsteps, other orderings are likewise possible provided that theprinciples of causality are maintained.

The one or more embodiments are used herein to illustrate one or moreaspects, one or more features, one or more concepts, and/or one or moreexamples. A physical embodiment of an apparatus, an article ofmanufacture, a machine, and/or of a process may include one or more ofthe aspects, features, concepts, examples, etc. described with referenceto one or more of the embodiments discussed herein. Further, from figureto figure, the embodiments may incorporate the same or similarly namedfunctions, steps, modules, etc. that may use the same or differentreference numbers and, as such, the functions, steps, modules, etc. maybe the same or similar functions, steps, modules, etc. or differentones.

While the transistors in the above described figure(s) is/are shown asfield effect transistors (FETs), as one of ordinary skill in the artwill appreciate, the transistors may be implemented using any type oftransistor structure including, but not limited to, bipolar, metal oxidesemiconductor field effect transistors (MOSFET), N-well transistors,P-well transistors, enhancement mode, depletion mode, and zero voltagethreshold (VT) transistors.

Unless specifically stated to the contra, signals to, from, and/orbetween elements in a figure of any of the figures presented herein maybe analog or digital, continuous time or discrete time, and single-endedor differential. For instance, if a signal path is shown as asingle-ended path, it also represents a differential signal path.Similarly, if a signal path is shown as a differential path, it alsorepresents a single-ended signal path. While one or more particulararchitectures are described herein, other architectures can likewise beimplemented that use one or more data buses not expressly shown, directconnectivity between elements, and/or indirect coupling between otherelements as recognized by one of average skill in the art.

The term “module” is used in the description of one or more of theembodiments. A module implements one or more functions via a device suchas a processor or other processing device or other hardware that mayinclude or operate in association with a memory that stores operationalinstructions. A module may operate independently and/or in conjunctionwith software and/or firmware. As also used herein, a module may containone or more sub-modules, each of which may be one or more modules.

As may further be used herein, a computer readable memory includes oneor more memory elements. A memory element may be a separate memorydevice, multiple memory devices, or a set of memory locations within amemory device. Such a memory device may be a read-only memory, randomaccess memory, volatile memory, non-volatile memory, static memory,dynamic memory, flash memory, cache memory, and/or any device thatstores digital information. The memory device may be in a form asolid-state memory, a hard drive memory, cloud memory, thumb drive,server memory, computing device memory, and/or other physical medium forstoring digital information.

While particular combinations of various functions and features of theone or more embodiments have been expressly described herein, othercombinations of these features and functions are likewise possible. Thepresent disclosure is not limited by the particular examples disclosedherein and expressly incorporates these other combinations.

What is claimed is:
 1. A method comprising: initiating, by acryptocurrency wallet of a user computing device of one or more usercomputing devices of a cryptocurrency collateral system, a payment witha merchant computing device of the cryptocurrency collateral system,wherein the merchant computing device accepts a desired currency;determining, by a network computing device of the cryptocurrencycollateral system, an amount of collateral cryptocurrency required toback the payment; locking, by the cryptocurrency wallet, the amount ofthe collateral cryptocurrency to back the payment; sending, by thenetwork computing device, an amount of the desired currency to themerchant computing device to complete the payment; and when thecryptocurrency wallet sends funds to the network computing device tocover the payment: releasing, by the cryptocurrency wallet, the amountof the collateral cryptocurrency.
 2. The method of claim 1, wherein thecryptocurrency wallet is associated with the network computing device.3. The method of claim 1, wherein the determining the amount of thecollateral cryptocurrency is based on one or more of: characteristics ofthe payment; characteristics of the user computing device;characteristics of the merchant computing device; characteristics of thecollateral cryptocurrency; and characteristics of the cryptocurrencywallet.
 4. The method of claim 1, wherein the desired currency includesone of: fiat currency; and a cryptocurrency accepted by the merchantcomputing device.
 5. The method of claim 1, wherein the locking theamount of the collateral cryptocurrency comprises: locking, by thecryptocurrency wallet, the amount of the collateral cryptocurrency in asmart contract of one or more smart contracts of the cryptocurrencycollateral system.
 6. The method of claim 1 further comprises: when thecryptocurrency wallet does not send funds to cover the payment to thenetwork computing device: using, by the network computing device, theamount of the collateral cryptocurrency to cover the payment.
 7. Themethod of claim 1, wherein the sending the amount of the desiredcurrency to the merchant computing device comprises: sending, by thenetwork computing device, the amount of the desired currency to amerchant banking computing device associated with the merchant computingdevice for deposit therein.
 8. A computer readable memory comprises: afirst memory element that stores operational instructions that, whenexecuted by a cryptocurrency wallet of a user computing device of one ormore user computing devices of a cryptocurrency collateral system,causes the cryptocurrency wallet to: initiate a payment with a merchantcomputing device of the cryptocurrency collateral system, wherein themerchant computing device accepts a desired currency; a second memoryelement that stores operational instructions that, when executed by anetwork computing device of the cryptocurrency collateral system, causesthe network computing device to: determine an amount of collateralcryptocurrency required to back the payment; a third memory element thatstores operational instructions that, when executed by thecryptocurrency wallet, causes the cryptocurrency wallet to: lock theamount of the collateral cryptocurrency to back the payment; a fourthmemory element that stores operational instructions that, when executedby the network computing device, causes the network computing device to:send an amount of the desired currency to the merchant computing deviceto complete the payment with the merchant computing device; and a fifthmemory element that stores operational instructions that, when executedby the cryptocurrency wallet, causes the cryptocurrency wallet to: whenthe cryptocurrency wallet sends funds to the network computing device tocover the payment: release the amount of the collateral cryptocurrency.9. The computer readable memory of claim 8, wherein the cryptocurrencywallet is associated with the network computing device.
 10. The computerreadable memory of claim 8, wherein the second memory element furtherstores operational instructions that, when executed by the networkcomputing device, causes the network computing device to determine theamount of the collateral cryptocurrency based on one or more of:characteristics of the payment; characteristics of the user computingdevice; characteristics of the merchant computing device;characteristics of the collateral cryptocurrency; and characteristics ofthe cryptocurrency wallet.
 11. The computer readable memory of claim 8,wherein the desired currency includes one of: fiat currency; and acryptocurrency accepted by the merchant computing device.
 12. Thecomputer readable memory of claim 8, wherein the third memory elementfurther stores operational instructions that, when executed by thecryptocurrency wallet, causes the cryptocurrency wallet to lock theamount of the collateral cryptocurrency by: locking the amount of thecollateral cryptocurrency in a smart contract of one or more smartcontracts of the cryptocurrency collateral system.
 13. The computerreadable memory of claim 8 further comprises: a sixth memory elementthat stores operational instructions that, when executed by the networkcomputing device, causes the network computing device to: when thecryptocurrency wallet does not send funds to cover the payment to thenetwork computing device: using, by the network computing device, theamount of the collateral cryptocurrency to cover the payment.
 14. Thecomputer readable memory of claim 8, wherein the fourth memory elementfurther stores operational instructions that, when executed by thenetwork computing device, causes the network computing device to sendthe amount of the desired currency to the merchant computing device by:sending the amount of the desired currency to a merchant bankingcomputing device associated with the merchant computing device fordeposit therein.